Don’t Get Too Excited: Bitcoin Price Still Set for Crash to $2,800
The rise to $5,000 USD was exciting for people watching the bitcoin price, but we shouldn’t get our hopes up quite yet. According to technical indicators, the price is wrapped around the $5,000 level — unable to overcome it — and it’s running out of support.
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Bitcoin Price Technical Analysis
With the recent 1,000-point jump in the bitcoin price, public attention quickly shifted to the bitcoin market. A reinvigorated hope emerged, with expectations pointing to a new bull run. However, volume retracement has created confusion in the markets, sending opinions back to a state of uncertainty.
Therefore, the various explanations and predictions suggesting higher and more optimistic targets for the bitcoin price do not have any technical grounds right now. In reality, a combination of pushback from mainstream media and less-than-positive results from Mass Psychology Analysis has given way to a new wait-and-see trading pattern. Here, investors will hold off on pushing the price higher until it can be determined whether the average basic signs are reliable.
Basic support and resistance analysis cannot find a real support area any higher than $3,500. Additionally, a resistance zone can be evaluated at $5,500 due to the 62 percent Fibonacci retracement effectiveness that dominated 2018.
The sudden 1,000-point jump in the bitcoin price acted as an uppercut, abruptly jumbling technical indicators to reflect false bullish signs. This rapid adjustment led analysts and investors to confusion when most of the market didn’t confirm those apparent green lights — with the price even stepping back from $5,500 to $5,000.
Thus, to be safe, we must conclude that the bearish target at $2,800 is still active and necessary to ending the bear cycle started in December 2017. Most analyses still allow a new bullish cycle to arise from that level, a cycle with real technical support and forward momentum.
If and when the bitcoin price re-enters the lateral channel it has recently left, all current bullish signals will be called off and an emergency landing at $3,000 or below would likely take place. From there, we should see strong signals of bullish accumulation before another bull run is launched.
According to Japanese Candlestick Analysis, a new distribution area has emerged between $5,500 and $4,800. The Soldiers of demand are waiting at a correction level near $4,500, where they will enter the battlefield with a higher chance at victory over offer’s Crows.
With the market extremely exposed to mainstream media and political factors, Bollinger Bands point to a correction at $4,500. If this downward movement is confirmed, a psychological barrier can be expected to stop the price drop. However, that defense would be broken down if the Soldiers flee the battlefield as they did in 2018. From there, Cros would take control and push the action down to $3,000. After a certain point, the Crows will become too weak to continue their push, and the soldiers will return for guaranteed victory.
What do you think will happen to the bitcoin price? Share your predictions in the comments section.
If you find Ramiro’s analyses interesting or helpful, you can find out more about how he comes to his conclusions by checking out his primer book, the Manual de Análisis Técnico Aplicado a los Mercados Bursátiles. The text covers the whole range of technical analysis concepts, from introductory to advanced and everything in between. To order, send an email to [email protected]
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This technical analysis is meant for informational purposes only. Bitsonline is not responsible for any gains or losses incurred while trading bitcoin.