The recent decline in Bitcoin (BTC) at the 14-month lows has left the cryptocurrency on track for its biggest annual loss.
Only three weeks ago, cryptocurrency was changing hands to $ 6,300 – already a 54% decline since the start of the year, according to CoinDesk's Bitcoin Price Index (BPI). The dominant narrative of the market then was that BTC would cut its losses in the last few weeks of 2018, after touching about $ 6,000 in five months in October.
However, on November 14, BTC crashed below its fundamental 21-month exponential moving average (EMA) support, signaling a sell-off pick-up from the record $ 20,000 level reached last December. As a result, prices fell to lows of 14 months below $ 3,500 on November 25 before regaining some balance.
With bears continuing to keep pace, a significant recovery from current levels seems unlikely before the end of the year, and BTC looks set to trigger its three-year winning streak with a 73% annual price decline , the largest ever recorded.
As seen in the table above, the only previous annual loss of BTC was 57% in 2014. The loss of this year would be the largest ever recorded until prices remain below $ 5.959.
Meanwhile, the technical charts indicate that the cryptocurrency could extend the loss further before the end of the year.
As seen above (pricing data via Bitstamp), BTC has found acceptance below the crucial support of the 200 week EMA, reinforcing the already bearish technical structure represented by the breaking of the descending triangle, confirmed two weeks ago .
BTC suffered a symmetrical breakdown of the triangle on the 4-hour chart, indicating that the recent corrective rebound ended at $ 4,400 at the latest on November 29, and the bears probably regained control.
The stacking order of the EMA of 50 candles, under the EMA of 100 candles, under the EMA of 200 candles is also a classic bear indicator.
Therefore, BTC is likely to test the recent minimum of $ 3,474 in the following days.
- Bitcoin is on track to record the largest annual decline in registered prices. This would only change if prices rose over $ 5.959.
- The symmetrical breakdown of the triangle seen in the 4-hour chart favors a decline to $ 3,474 (November 25th low). Acceptance below that level would further strengthen the bear's grip and open the negative side towards psychological support of $ 3,000.
- A short-term bullish reversal would only be confirmed above $ 4,400 (November 29th high).
Revelation: The author does not hold cryptocurrency assets at the time of writing.
Bitcoin image through CoinDesk archives; price charts for Trading View