For much of 2019, bitcoin and the broader cryptocurrency market made a bullish wave, as a reduction in short selling allowed prices to rise. However, on Thursday the price of the bitcoin crashed below the value of $ 4,000, and now a prominent trader warns that it is dangerously close to approaching a level where even the bulls need "GTFO".
Mark Dow sounds the alarm on Bitcoin
This trader is Mark Dow, a former IMF economist who has notoriously reduced the price of bitcoins from near-historic highs of 2017 to less than $ 3,750.
Commenting on Thursday's two-step decline from $ 4,000 to less than $ 3,600, Dow said the criptale high-tech indicators were not beautiful.
"Nasty little air pocket in #bitcoin.If you are a bull crypto, you DO NOT want to see this broken red line (~ 3550) It would be a very bearish sign," he tweeted on Thursday. "The man, #bitcoin, technically, is really on the ropes here."
– Dow (@mark_dow) 11 January 2019
Dow's perspective on bitcoin is interesting, considering that it is relatively agnostic about its long-term fundamental value as an asset and, to be honest, it knows very "little" beyond the fact that it is "highly negotiable".
As he tweeted at the beginning of this month:
I still have to listen to a case of positive and credible use for #bitcoin. Also, I see many delusional topics and scammy promotions. However, the truth is that I know very little about it. What I know is that it has been highly negotiable on the basis of models and I suspect it will continue to be so.
According to Dow, yesterday's withdrawal brought the bitcoin dangerously close to approaching a level at which even bullish traders should "GTFO".
– Dow (@mark_dow) 10 January 2019
On Coinbase, for example, the price of the bitcoin dropped to $ 3,560, just $ 10 above the Dow escape hatch, although it quickly climbed back over $ 3,600 to give traders a little breath. If that line of support can not hold up, Dow warned that the market could see another sharp fall while continuing to frantically seek a fund.
Thursdays Drop was "insignificant": Mati Greenspan
However, other technical analysts took a different reading from the graphs.
Writing in the daily market commentary made available to CCN, the senior market analyst at eToro Mati Greenspan – an admitted cryptocurrency bull – said the movement was "actually insignificant" since bitcoin remained in the range where it has been negotiated since mid-November.
"The total 12% peak-to-valley movement was actually insignificant, all we are seeing is a movement from the top to the bottom of the range," wrote Greenspan. "As we have discussed since mid-November, the current range is from $ 3,000 to $ 5,000 (dotted blue lines) .It seems now that bitcoin has opened a new mini-range within the one to be [$3,550] about $ 4,200 (yellow lines). "
Although the movements probably took many investors by surprise, Greenspan said that they should not exaggerate on their importance.
Movements within a beam can sometimes be as sudden as we saw yesterday, but unless there is a breakout of key levels there is not much to write at home.
In any case, the price of the bitcoin has recovered a small part of its losses on Thursday, rising to an aggregate level of $ 3,701 at the time of writing. The overall cryptocurrency market, meanwhile, posted a valuation of $ 123.6 billion.
Shutterstock foreground image. Price charts from TradingView.