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Since January 2018, Bitcoin (OTCQX: GBTC) has been in a bearish phase, which led to a decline of 70.19% compared to the US dollar. However, in the last two weeks, things went well for cryptocurrency, as it managed to rise from $ 5.799 to $ 7.410. However, I believe that Bitcoin (BTC-USD) now has a downside reversal, which will result in a fall of up to $ 5.388. To illustrate this in detail, I will elaborate on the latest fundamental news concerning the currency (COIN), while I will also take a peek from the technical point of view.
Key News:
- The Lightning Network:
- Global Bitcoin The adoption program has received a push in the right direction after CoinGate has announced it will add 4,000 traders to its off-chain system. Merchants will be able to receive payments via the Lightning network, which will significantly reduce transaction costs by increasing transaction speeds.
- When transmitting a lightning payment, both parties deposit their funds in a Bitcoin address called a channel. Once the channel has been set up, both parties will be able to exchange funds continuously. Furthermore, the channel system will help to increase Bitcoin's security level.
- Bitcoin and Iran:
- The Iranian government has announced that it will consider the extraction of cryptocurrencies as an industry. This amendment to the law came into force due to the fact that the government is facing intense pressure to adopt cryptocurrencies as this will help mitigate the effect of US-imposed economic sanctions. Furthermore, the adoption of cryptocurrencies will facilitate regular trade between Teheran and its partners. Because of this news, the price of Bitcoin has touched the sign of $ 24,000 in Iranian exchanges.
- The Secretary of the Supreme Council of Cyberspace of Iran said that within three weeks the Central Bank of Iran will have completed the drafting of a political framework for the cryptocurrency industry. He also said that Iran is considering launching its cryptocurrency.
- The dumping of the Bitcoin whales:
- The cryptocurrency market was bleeding due to the Bitcoin whales that emptied their coffers. This, in turn, caused abruptly the upward trend observed in previous sessions.
- However, with a market capitalization of less than $ 300 billion, this dumping will have a devastating effect not only on Bitcoin but also on the total cryptocurrency market. Furthermore, it is said that Silk Road, which is one of the biggest whales, will sell an important part of their Bitcoins in order to repay their creditors.
Technical analysis:
Daily chart:
<img src = "https://static.seekingalpha.com/uploads/2018/9/5/48894499-15361619795259337.png" class = "ac" alt = "Daily chart Bitcoin [19659015] The daily chart of the cryptocurrency indicates that in the next few days, Bitcoin will be beaten black and blue.I say this as I expect the bearish trend to continue due to the formation of a bearish bearish candle that indicates to investors that bears have struggled with market control from bulls, and because of the big bearish candle, we can expect two similar bearish candles to be formed in the coming days and which will contribute to the completion of a model of three black crows.
of the target price, I do not expect Bitcoin to extend its bearish fall above the support level of 161.8% to $ 5.388. This is due to the fact that this level is a proven support zone. 100% support is $ 6.158, while the 127.2% support level is $ 5.819.
On the indicator, the RSI of the cryptocurrency is in decline and has just broken below the score of 60 which clearly indicates that a bearish continuation is on the books. In addition, the ADX lines are rising steeply, thus representing the strength of bearish strength.
Weekly Chart:
The weekly chart of the cryptocurrency that Bitcoin is all set for a bearish reversal due to the formation of a pattern of covering dark clouds. The previous green candle in the model tells us that the bulls have complete control. However, we know that it is not true when the tide has changed due to the current candle that closes inside the actual body of the first candle. Furthermore, the cryptocurrency is exchanged below the 20 and 50 day moving averages.
On the support front, Bitcoin has currently gained support from the 23.6% level to $ 6.906. However, I expect you to rotate up to the Fibonacci level of 78.6% to $ 5.474. But if the fall does not culminate at this level, then Bitcoin will plunge to the 100% support level at $ 4,917.
The Big Picture:
In conclusion, I am supporting the bears who are in the driver's seat for the short and long term. This notion is fueled by the fact that the technicians and the bases support a descent. However, whatever the way you decide to negotiate, make sure you use intermediate stops, as this will contribute to the preservation of capital that is paramount.
Trading of fortune.
Disclosure: I / we have no positions in all the titles mentioned, and no plan to start any position within the next 72 hours.
I wrote this article alone, and expresses my opinions. I'm not getting any compensation for this (other than Seeking Alpha). I have no business relationship with any company whose title is mentioned in this article.
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