- Moving average indicators of bitcoin price drive look bearish.
- The 2013 downturn presents warning signals to bitcoin strategists.
Bitcoin: It all seems something good isn’t coming for Bitcoin. Technical traders who predicts bitcoin’s future price direction in chart patterns are seeing more indications that suggest the world’s largest cryptocurrency by market share may have further to fall. Bitcoin’s moving average within the last 50-day has dropped to the nearest proximity to its 200-day moving average in 9 months. Any drop beyond this level, which hasn’t happened since 2015, would signals fresh weakness to come for technical traders who will name such a move a “death cross.” Another moving-average indicator of momentum has already turned bearish.
Though many crypto investors do not follow technical analysis, the cryptocurrency world is drawing interest from professional traders who pay increasing attention to the indicators, since bitcoin marked a record last December.
During the first 10 months in 2015, when bitcoin’s 50-day moving average last drifted below the longer measure, bitcoin witnessed a dull performance, it fell about 5.2 percent in that period, and then rallied 43 percent through year-end from the day it broke back above the resistance level. Bitcoin has remained above that line ever since 2015 and accumulated three successive annual gains in the process.
Paul Day, a technical analyst and head of futures and options at Market Securities Dubai Ltd. said:
“There’s been a definitive shift over the past couple of months after the bubble activity at the end of 2017.”
Paul studied the bitcoin’s 2013 tumble for clues on how it may perform this time around. He concluded that if the downtrend is repeated. This will gear bitcoin up for a 76 percent tumble from late February highs, and this would take the cryptocurrency to a paltry $2,800 per coin.
Another indicator that suggests weakness is the moving average convergence-divergence indicator, which measures price drive to flash buy and sell signals.
Notwithstanding all these, Bitcoin investors should better make peace with volatility.
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