Today let’s analyze Bitcoin charts. Recently Bitcoin has gone +20% and there have been many speculations on why that happened. It remarkably grew by $1000 in a little more than an hour. Bitcoin experienced yet the most significant rally this year. When Bitcoin went pass $5,200 we advised you all to be careful on our social media pages:
But after a good run-up, now we are starting to have a minor correction. Higher timeframe still screams for a cooldown due to the fact that the RSI is still overbought. Lower timeframes are also oversold and just bounced off support on 1H charts which signals for a possible small upwards move for Bitcoin.
However, Bitcoin chart’s short timeframe trend seems to have reversed as shown by the H&S pattern. Although it is not perfectly symmetrical, it is an indication of a forming lower high which means – signals for a possible trend reversal!
Today we look at the Bitcoin market analysis. Currently, Bitcoin is heading towards historical resistance level that caused some of the largest price drops during the current bear market. From the macro market perspective, there are two very likely scenarios and one not so much.
Bullish scenario – We break the resistance and head towards the previous accumulation zone (Highlighted blue box with green arrow). To break this resistance we need high buying volume which in the current market state is highly unlikely. However, there are factors that might act as a catalysator for bullish move initiation (See further text). If the accumulation zone is broken, afterward the bull market is most likely to be ignited. This is a really unlikely event.
Bearish scenario – Heading towards resistance will most likely trigger fast 1-2 candle drop to previous historical accumulation zone. We cannot know how the price will react to further levels. Because there is no historical data that supports any predictions in such market conditions regarding volume and exposure.
Accumulation scenario – This scenario is the most unlikely one because the resistance line historically has proven to cause rapid movements. Going sideways through resistance like this on such a high timeframe is the most unlikely event. The only viable option would be a small breakout that leads to a retest of the resistance and results in accumulation.
A catalyst for a bullish scenario is recently widely seen bitcoin halving. Halving basically means inflation decrease. Bitcoin block reward will decrease, meaning that less bitcoins are emitting every day which results in a price increase. Closer the halving gets, historically, the more market shifts to a bullish sentiment. Right now we are at the proportional historical point where time until halving/bitcoin price makes a reversal move.
Today, on June 24th Bitcoin (BTC) price has come to a new low, the lowest it has been in 2018. The day started off with around $6125, but throughout the day it slowly fell to $5826, according to coinmarketcap.com. It happened around 19:00 UTC and after that it quickly, in an hour, rise up to $6215.
If we compare todays’ price with the one exactly one year ago, it has gained more than 2 times. On June 24th 2017 19:00 UTC BTC price was around $2700.
It is a decent progression taking the fact that this year has been the year when cryptocurrencies evolved the most as a whole, became known to the public and now are being regulated by governments. I think we could see even lower prices by the end of July when is the deadline of G20 recommendations for cryptocurrency regulation. A few countries from EU like Germany and Switzerland have stated their approximate position, but the final recommendations we will hear at the end of July.
Hopefully with this kind of a progression we can anticipate a $8000-$9000 Bitcoin next summer solstice.