Bitcoin (BTC) Price Analysis: Why Bulls are in Control Despite Yesterday’s 11.2% Drop

Bitcoin (BTC) Price Analysis: Why Bulls are in Control Despite Yesterday’s 11.2% Drop

 

Latest Bitcoin (BTC) News

Asset prices are cyclic in nature. Initial euphoria can pump prices to new levels causing overvaluation and the resulting correction can cause depression as hopes of moon slings are crushed and assets fairly valued. In an unregulated field as crypto, the hype element can be depressing and that is what happened last year. With falling prices, traders were always hoping for price recoveries but the challenge here is to nitpick these bottoms—a dangerous job akin to catching a falling knife.

Read: Rakuten, the Japanese e-Commerce Giants’ App Set to Support Crypto Payments

While some can argue that Bitcoin and indeed crypto asset prices are in the road to recovery, conservative traders ought to wait for strong and better signals. In our case, it’s all about waiting for strong breakouts above key resistance levels.

Also Read: Bitcoin Headed for the Golden Cross to Usher in the Next Bull Run

For developers, the path to the building has been paved now that speculators are fleeing the crypto scene. And the co-founder of Reddit Alexis Ohanian agrees that builders and other true believers not motivated by quick money are back creating applications and investing in infrastructure that will finally spur adoption driving prices and Bitcoin as a solution to new levels.  In an interview with Yahoo, this is what he said:

“The speculators have fled. And that’s great because the people who are now building on crypto are true believers. And they’re actually builders. They’re actually building the infrastructure that it’s going to take to really make this happen.”

BTC/USD Price Analysis

As aforementioned, prices are cyclic and yesterday’s drop reaffirms this observation. Well, at the time of press, BTC was down 11.2 percent from yesterday’s close and as it is, bulls have been clipped. However, there are solid reasons to believe that this is just a mere correction, a dip in an uptrend. From a top-down approach, notice that Bitcoin (BTC) bulls are technically in control but consolidating inside a bull bar of a week ending Dec 23.

In an effort versus result point of view, this is bullish and the only move that can invalidate this stance is liquidation driving prices below Dec 2018 lows of $3,200—data streams from BitFinex. Considering the recent sequence of events, that is unlikely and as emphasized before, what we need is confirmation of week ending Dec 2018 bull bar.

That will happen once prices edge past the congestion and print above $4,500—or Dec 2018 highs complete with high trade volumes exceeding 273k. It will be perfect if they are above week ending Nov 25—434k. Therefore, despite this blip, risk-off sellers can find entries in lower time frames and buy on dip while conservative, risk-averse traders can only load BTC once prices print above $4,500.

All Charts Courtesy of Trading View—BitFinex

Disclaimer: Views and opinions expressed are those of the author and aren’t investment advice. Trading of any form involves risk and so do your due diligence before making a trading decision.