In our first chart you can see the downtrend channel that we have drawn back in June. It was breached only once in August. The recent false “breakout” that many saw in Bitcoin proved to be not even a breakout. As Bitcoin did not manage to come close to a breakout of the downtrend channel. Bitcoin is forming lower highs each time a bounce from the lows at around 6000 – 6400 takes place. This is again a bearish sign. In our last technical analysis, we said that a pathbreaking decision is ahead of us. This still accounts for the current market. We estimate now that the correction goes on for some weeks. Perhaps by mid or end October we will have reached the point where the market is ready for upwards movement again. But why are we sure that Bitcoin will move up again?
Our positive outlook in the crypto market is based on the Fibonacci retracement analysis. Bitcoin is at the lower end of the Fibonacci retracement. When you retrace from the very start of the correction in December. According to us, Bitcoin will also move to the lower Fib levels on short-term. This is, of course, not an insurance that the market will move up again. But the likeliness for that is simply higher than the opposite. In addition to that, the news around Bitcoin & Co. are fundamentally positive. People in Turkey, Iran, Venezuela and recently also Argentina adopt Bitcoin in spite of their own domestic fiat currencies. An excellent proof of the viability of cryptocurrencies.
In our last analyses, we stated that our best bet is that Bitcoin returns to “its normal growth” that started with the last rally. An insight that reveals to us that we are, in fact, not in a bear market, but still in a bull market. While the scenario of a return to this “normal growth” is still possible, it seems sure that the rejection will go for now and maybe even close to the resistance level from where on further analysis would be necessary.
The resistance lies at about the 5900 – 6100 USD range. The resistance seemed to have become brittle after the chart hit this level three times. However, Bitcoin would hit the resistance now for the fifth time in 10 months now. This is not necessarily a sign that the resistance needs to break this time. However, there is not too much potential for further downtrend movement. So for that case, we adjusted our new entry-level to the 5300 – 5500 range.
However, the market still seems very undecided than ever since the beginning of the correction. Our advice to inexperienced traders would be to stay out of the market until a clear direction is in sight. Hope you trade successfully and of course DYOR.
Disclaimer: This is no financial investing advice.