Which Way Bitcoin Price? Current ‘Stablecoin’ Period Mimics Early 2017

“What’s the worth of these Bitcoin’s you retain speaking about?” a buddy asks me. I take a look at my telephone and it’s nonetheless averaging round $9,200. “About the identical as final month mate,” I replied. 

Bitcoin (BTC) value has hardly moved an inch within the final six weeks, barely transferring 2% in both path from its common value. Due to this fact, I’m beginning to suppose it’s a stablecoin now. 

Bitcoin’s present “stablecoin” interval resembles early 2017

Nevertheless, this lengthy interval of static value jogs my memory very a lot of early 2017, when Bitcoin stayed round $900 for the primary three months of the 12 months, which was adopted by an explosive 300% transfer within the second quarter, after which simply stored going.  

Each day crypto market efficiency. Supply: Coin360.com

The query on my thoughts now’s whether or not we will genuinely anticipate something like that to occur in 2020 now that half the 12 months is behind us, or whether or not Bitcoin has merely topped out and is ready to drop.  

Bitcoin’s downward development 

Everyone knows that the primary quarter of 2020 was brutal for Bitcoin. Nevertheless, after the Black Thursday dump in March, these fortunate folks that purchased on the backside have already seen a whopping 180% ROI on their funding.   

It could be naive of anybody to not anticipate a few of these individuals to be taking revenue, so a interval of consolidation is a very pure factor to anticipate.  

Nevertheless, what makes BTC very totally different from different property is the place the miners are discovering themselves in. They’ve 50% much less Bitcoin to promote than earlier than, and the impact of the consolidation following the mini bull-run has put BTC/USD in a downward development.   

BTC/USD 1-day chart

BTC/USD 1-day chart. Supply: TradingView 

On the similar time, Bitcoin is lower than 1% away from breaking out of this downward channel. The present value of Bitcoin is sitting at slightly below $9,300 and the resistance of the descending channel on the day by day is a mere $9,350.  

This additionally places the mid-channel assist round $eight,900, and the ultimate assist earlier than signaling a better transfer down at $eight,350. From right here, all hope of an instantaneous bull run can be misplaced. 

The hopium method

Zooming out to the weekly chart for Bitcoin, and drawing Fibonacci strains utilizing the 2017 ATH peak to the 2019 backside, we will see that BTC has been hovering across the zero.382 Fib for a number of weeks, typically crossing up, and typically crossing down.  

BTC/USD 1-week chart

BTC/USD 1-week chart. Supply: TradingView 

With Fibonacci buying and selling, you take a look at the subsequent ranges as potential targets, and sometimes as soon as the zero.382 has been damaged after rising via zero.236, the subsequent degree is the zero.5 or 50% Fib, which sits at $11,500.  

If the zero.382 of $9,250 can turn out to be assist within the upcoming week, then bears are in for a nasty time. Conversely, if the assist of $eight,350 fails to carry, it’s a great distance down for Bitcoin to go to search out new assist on the zero.236, which places the draw back goal at $7,000. 

The MACD is displaying indicators of a reversal 

BTC/USD 1-week MACD chart

BTC/USD 1-week MACD chart Supply: TradingView

In final week’s technical evaluation, the weekly MACD was trying very “weak” and as a result of cross bearishly. A cross up or down on the weekly MACD are pivotal factors for Bitcoin. You solely have to look via the historical past of the worth motion in comparison with the MACD to see that it’s the one indicator it’s good to time your shopping for and promoting of Bitcoin. 

Nevertheless, because of final week’s mini-alt season, it appears the curiosity in Bitcoin is selecting up, and that is mirrored by the blue MACD line altering its trajectory from right down to up. 

When the MACD blows open like this on decrease time frames, it’s a dealer’s worst nightmare if that they had failed to attend for affirmation because it’s a really early signal of a development reversal. In different phrases, Bitcoin bulls should not able to capitulate to the bears simply but.  

Diversify, Tether up, or HODL? 

Tether Market Cap

Tether Market Cap Supply: Coin360

Usually during times of consolidation, Bitcoin merchants have the selection of parking their realized earnings into Tether, affording them the luxurious to purchase the dip with ease or to re-enter on affirmation of a bullish reversal. 

Nevertheless, in a current article in Forbes a couple of formal investigation into Tether and its quick method in direction of a $10 billion market cap within the wake of Brock Pierce not too long ago saying his intentions of working for president of the US, I for one can be nervous holding any quantity of USDT proper now.  

As such, it appears probably that a big chunk of that $10 billion parked in Tether would logically begin heading into Bitcoin and top-tier altcoins. This may clarify the current surge in altcoins, in addition to affecting the outlook for Bitcoin within the instant future.

Bullish situation

If the worth of Bitcoin can push previous $9,350, there are just a few key areas of resistance that should be overcome earlier than $11,500 will be reached. 

First, there’s a giant promote wall round $9,500 on Binance, in keeping with the Tensorcharts heatmap. After this degree, attacking the multiyear resistance degree of $10,500 appears to be like prefer it could possibly be again on the playing cards, and with all of the Tether fud, this can be a situation that appears fairly promising. 

Orderbook heatmap

Orderbook heatmap. Supply: Tensorcharts

Bearish situation 

Utilizing the identical Tensorcharts heatmap, there’s an enormous purchase order forward of the $eight,900 assist at $eight,990. Ought to this degree fail to carry I’d be taking a look at $eight,350 as the subsequent degree for the descending channel on the day by day to remain intact.  

Breaking under $eight,350 might open up $7K BTC as a stark actuality within the brief time period. Nevertheless, with Tether doubtlessly off the desk within the brief time period, I doubt the bears may have an excellent week. 

The views and opinions expressed listed below are solely these of @officiallykeith and don’t essentially replicate the views of Cointelegraph. Each funding and buying and selling transfer includes danger. You need to conduct your individual analysis when making a choice.

About Tom Greenly

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