The purpose of this article is to detail my theory on why I feel as though the price of Bitcoin may be dropping soon.
If you find this article/information helpful — there’s way more where that came from (for free) at:
Telegram — t.me/CoinEducation (free Telegram channel — help links/analysis/news/insights 24/7)
Twitter — www.twitter.com/cryptomedicated
Be sure to leave me some claps and spread/share to all your friends so that I can continue to produce these articles for free!
Without further ado,
Bitcoin Price Analysis 6–20–2018
Since the news of the Bithumb hack, which may or may not have brought the price of Bitcoin down to the realm of $6.5k, it appears that the price has since recovered.
Be Wary of This Resistance Point Being Tested Three Times
Allow Me to Take a Slightly Zoomed Out View to the 4H Chart
My studies have taught me that the more times a resistance/support point is tested, the ‘stronger’ it becomes, signaling an impending reversal in the price.
What are the RSI and Momentum Indicators Telling You?
I believe that the daily is usually the best chart TF to get a true view of what’s going on, on a more macro level.
While this may look good, its a sign of an impending price reversal in my book.
Let me Tell You Why
On Bitcoin, I have noticed that, when the price is overbought — particularly on the daily — during this bear market, the price usually slams down on the reversal.
Check out what happened last time that Bitcoin was near these levels on RSI.
As you can see above, the drop was pretty precipitous. However, it is worth noting that there was one hell of a sell-off between June 9th and June 10th that accelerated the slump that occurred in the picture above.
So, I don’t expect that anything similar will occur in this situation — in terms of the amount of decline that will occur.
However, I do feel as though an imminent re-test of the $6.3k or lower, perhaps, is in the works and that folks should not be lulled to sleep by the recent price movement of Bitcoin at this present moment.
Even though the volatility has decreased, there is still plenty of opportunity for it to pick back up at any point in time. This is especially true when the volume is low on Bitcoin.
This is because low volume means that whatever is buoying the price of Bitcoin is more than likely weak buying power. So, when those buyers get pushed out of the market or longs get crushed on a sudden decline, there isn’t much selling power that is needed to continue to push the price down.
Many folks think that the downward drive in the price of Bitcoin during these sell-off events is due to a swarm of people running out and panicking.
However, this is not the case and it is usually due to a lack of buyers accompanied with a relatively moderate increase in selling volume.
Once again, to reiterate a lesson that I have stated before — if there’s no one to really buy something, then the price must go down.
Disclaimer: This is not financial advice. All opinions expressed within this piece are solely that of the author’s and should not be construed as advocacy for any particular trading strategy. Take everything seen above as research and information.
The author does not currently hold a position in the aforementioned coin, nor is he invested in any competitors.