Daily Archives: December 15, 2019

DedMityay - stock.adobe.com

Ah, Bitcoin. The stuff of dreams. The new frontier in currency and commerce. The gateway to a world dominated by blockchain technology, with newly-minted zillionaires lining of streets of urban and rural sites across the globe. Or, the speculative arm of a legitimate evolution of financial transactions.

Now, before you get all defensive about how amazing Bitcoin is, and tell me how out of touch I am (after all, at age 55, I am way too old to understand this stuff, right?), hear me out. I do see the role of blockchain technology in the global economy going forward.

However, I think of Bitcoin, the most famous of crypto-currencies, like Band-Aids are to adhesive bandages (hint: same thing, but one is a brand name, the other is just what the product is). Bitcoin is the proverbial poster-child for this new way to hold money. That is all fine with me. My point, though: just dont pretend it is a substitute for traditional hard currencies. Not yet, anyway.

My evidence for that statement: the price of Bitcoin is not at all stable. Its price is more volatile than most stocks. You wouldnt take the money you need to pay this months mortgage or buy food for your familys dinners this week, and put it in an S&P 500 Index Fund, would you? Actually, I am afraid of the answer from too many investors. But I digress. The point is that Bitcoin still appears to be a trading tool (toy?), rather than a store of value, which is the textbook definition of a stable asset.

For that reason, I refuse to look at Bitcoin as a currency when following its price movement. However, as a vehicle to trade to make profit on over periods of time, I see it the way I see stocks and ETFs: as something to chart, and to evaluate its reward/risk trade-off at any point in time.

And, while I have not yet invested Bitcoin for my clients or myself, I am willing to consider it if it meets my usual investment criteria. One of those is that it can be charted.

^NYB_technical_chart

Remember that time when Bitcoin ran up to seemingly impossible heights, then dipped below 8,000, then crashed to under 4,000? Above, you see the price of Bitcoin over the past couple of years. It shows that last dizzying episode from 2018. And to me, it appears to be setting up for a repeat performance.

Now, technical analysis (charting) is more precise when there is deeper data and history behind the price activity. With Bitcoins limited history as a popular asset, and the fact that it is not a business like a stock, we have less to work with than we would with a stock or commodity. However, if you look at the right side of the chart, you see an orange line. That line is falling, and it is close to falling below the red line. This is occurring while Bitcoin is quietly in the midst of repeating its early 2018 price pattern.

That last round of Bitcoin price drama had a similar pattern, as you can see in May of 2018. At that point, the orange line (which is the 50-day moving average of Bitcoins price) crossed below the 200-day moving average (the red line), just as it is poised to do now. That death cross as chart geeks often call it, is happening now at about the same Bitcoin price level (8,200) as it did then.

I dont know, but I wouldnt simply blow it off as a coincidence. After all, the downside risk of ignoring the chart pattern in Bitcoin was about $5,000. Bitcoin fell from that 8,200 level to about 3,250 at its December, 2018 low, before quadrupling in value 7 months later.

And that brings me back to my main point: Bitcoin is not an investment at this stage of its development as a marketable security. Neither are small marijuana companies, and penny stocks. They are trading tools for virtual rooms of speculators. It is somewhere between a casino and the latest version of the greater fool theory, where you can profit from owning it as long as someone is willing to buy it from you. I would insert an analogy to tulip bulbs here, but suffice it to say, just look that up yourself.

Last point: one of my personal investment tenets, and what I say to clients who tell me they are investing in Bitcoin or some other trading toy, is this: its OK to take big shots, as long as you do it with small amounts of money. Just dont confuse speculation with investing.

Comments provided are informational only, not individual investment advice or recommendations. Sungarden provides Advisory Services through Dynamic Wealth Advisors

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What The Charts Say About Bitcoin - Forbes

Bitcoin and cryptocurrency markets are well known to be highly volatile but a sudden 70% plunge in under one hour is extreme even for the scandal and scam-ridden crypto market.

Matic, a digital token used on the blockchain scalability-focused Matic Network, suddenly crashed around 70% last night, before a slight recovery.

[Update: 7:15pm December 10 2019] Matic failed to make up ground during today's trading, with the cryptocurrency now priced at $0.017 per token. The fall in the matic price may have boosted one of its closest rivals, chainlink, which is up almost 10% on the day to $2.28.

The reason for the collapse in the matic price, which dropped to $0.013 from $0.042 in under an hour, was not immediately clear though the chief executive of popular bitcoin and cryptocurrency exchange Binance, Changpeng Zhao, took to Twitter to reassure matic users.

Traders and investors have been scrambling to find out the reason behind the sudden price collapse, ... [+] with concerns it could spread to bitcoin and other major tokens.

"Our team is still investigating the data, but it's already clear that the matic team has nothing to do with it," Changpeng Zhao, who's often known simply as CZ, said.

"A number of big traders panicked, causing a cycle. Going to be a tough call on how much an exchange should interfere with people's trading."

Meanwhile, the cofounder and chief operations officer of the Matic Network, Sandeep Nailwal, said he is investigating the cause.

"It will be clear very shortly that we are not behind this, as some [fear, uncertainty, and doubt] accounts are trying to insinuate," Nailwal said.

"We will post a detailed analysis and we will come out stronger than ever from this evident manipulation."

The bitcoin price, as well as the wider cryptocurrency market, has not been hit by the sudden matic sell-off with prices of other major tokens relatively flat across the board.

One popular bitcoin and cryptocurrency commentator and trader, Alex Krger, highlighted matic's rise and fall over recent weeks as "the stuff of dreams and nightmares."

"What happened with matic can happen to any token," Krger said via Twitter.

"It would be very surprising for it to happen to the large caps, but it can still happen. Adjust selling volume by market cap or order book liquidity, and presto. Hence why crypto is traders paradise, investors hell," Krger said, adding there's currently an "apocalypse" going on with minor cryptocurrencies.

The matic price began a huge bull run towards the end of November, breaking away from the wider ... [+] bitcoin and cryptocurrency market.

Matic has soared over recent weeks and recorded a market capitalization of over $100 million for the first time since its launch earlier this yearup 180% in just two weeks.

The matic price has reportedly been boosted recently by blockchain-based game Battle Racers launching a range of so-called crypto-collectibles on the Matic Network sidechain, sending the price up by around 10% in a 24-hour trading period last week.

Meanwhile, some matic investors and traders have speculated the sudden move lower could be the result of a so-called pump and dump, where a large buyer inflates the price over time before offloading their holdings, or an exit scam, where the developers of a digital asset suddenly sell their holdings and abandon the project.

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This Bitcoin Rival Just Crashed By A Shocking 70% In An Hour [Update] - Forbes

Bitcoin and cryptocurrency has long been known to appeal more to younger generations than older ones (though there are some notable exceptions).

Meanwhile, the bitcoin price has been boosted in recent years by adoption from the traditional financial services industry and this is expected to increase as Millennials (aged between 25 and 39) and Gen Z (those born between 1996-2010) become financially mature.

Now, a report has found Grayscale Investments Bitcoin Trust, a publicly tradable bitcoin and cryptocurrency investment vehicle, is among the top five equity holdings for Millennials, next to technology giants Amazon, Apple, Tesla and Facebookand ahead of investor darlings Netflix and Microsoft.

Bitcoin looks set to end the year as one of the best-performing assets, up around double where it ... [+] began 2019.

The Grayscale Investments Bitcoin Trust, which recorded inflows of $255 million for the third quarter, up three-fold on the previous quarter, is also more popular than stocks of Warren Buffetts conglomerate Berkshire Hathaway, movie studio Walt Disney, and China's biggest online retailer Alibaba, according tothe report from U.S.-based bank and stock brokerage Charles Schwab.

The Grayscale Bitcoin Trust was found to be held by 1.84% of Millennials surveyed by Charles Schwab, with Netflix at 1.58% and Microsoft at 1.53%.

Elsewhere, online retailer Amazon and iPhone-maker Apple were found to be popular across the generational divide, with the two U.S. tech giants holding the top two spots for Millennials, Gen X, and Baby Boomers.

Google's parent company Alphabet was notably absent from the list of company stocks held by Millennials.

The report chimes with research out earlier this year that found there's a growing interest in bitcoin and cryptocurrency investments amongst Millennials and younger generations as they deal with the long-term effects of the global financial crisis and a lack of trust in the traditional financial services sector.

Technology companies dominate the most popular investments for all generations, though only ... [+] Millenials show much interest in bitcoin.

Earlier this year, Grayscale Investments launched a campaign called #DropGold, aiming to make "investment portfolios to reflect that bitcoin has become digital gold for todays forward-thinking investors."

"There is a generational shift in how individuals are approaching investing. We strongly believe that investments in gold will be reallocated to bitcoin as Baby Boomers begin transferring their wealth to a younger generation of investors, one that wasnt raised on the gold standard," said Barry Silbert, founder and chief executive of Digital Currency Group and its subsidiary Grayscale Investments, said at the time.

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Bitcoin Beats Netflix And Microsoft - Forbes

Bitcoin is on the brink ofanother massive price surge that will take its value up to $100,000 (75,000) in 2020, according to the founder of the worlds most famous dark web marketplace.

Ross Ulbricht is currently serving a double life sentence in a US prison for creating the now defunct Silk Road, which was the first placebitcoin was used as a currency on a significant scale.

Following his arrest in October 2013, bitcoin experienced its first major price spike that saw it shoot from $100 to over $1,000 in a matter of months. After crashing back down to $175, it then went on another positive run in 2017 that took it close to $20,000 by the end of that year.

Sharing the full story, not just the headlines

Since then, bitcoin has tumbled once more, reaching below $4,000 at the start of 2019 before recovering to todays price of around $7,000. (At the time of his arrest six years ago, the FBI seized 144,000 bitcoins from Silk Road andUlbricht- worth just over $1 billion at current prices.)

Ulbrichtclaims he predicted both of these waves from his prison cell and believes another one is already building a prediction he says he is able to make without being swayed by day-to-day price movements and general market hubris his imprisonment shelters him from.

On 3 January, 2009, the genesis block of bitcoin appeared. It came less than a year after the pseudonymous creator Satoshi Nakamoto detailed the cryptocurrency in a paper titled 'Bitcoin: A peer-to-Peer Electronic Cash System'

Reuters

On 22 May, 2010, the first ever real-world bitcoin transaction took place. Lazlo Hanyecz bought two pizzas for 10,000 bitcoins the equivalent of $90 million at today's prices

Lazlo Hanyecz

Bitcoin soon gained notoriety for its use on the dark web. The Silk Road marketplace, established in 2011, was the first of hundreds of sites to offer illegal drugs and services in exchange for bitcoin

On 29 October, 2013, the first ever bitcoin ATM was installed in a coffee shop in Vancouver, Canada. The machine allowed people to exchange bitcoins for cash

REUTERS/Dimitris Michalakis

The world's biggest bitcoin exchange, MtGox, filed for bankruptcy in February 2014 after losing almost 750,000 of its customers bitcoins. At the time, this was around 7 per cent of all bitcoins and the market inevitably crashed

Getty Images

In 2015, Australian police raided the home of Craig Wright after the entrepreneur claimed he was Satoshi Nakamoto. He later rescinded the claim

Getty Images

On 1 August, 2017, an unresolvable dispute within the bitcoin community saw the network split. The fork of bitcoin's underlying blockchain technology spawned a new cryptocurrency: Bitcoin cash

REUTERS

Towards the end of 2017, the price of bitcoin surged to almost $20,000. This represented a 1,300 per cent increase from its price at the start of the year

Reuters

On 3 January, 2009, the genesis block of bitcoin appeared. It came less than a year after the pseudonymous creator Satoshi Nakamoto detailed the cryptocurrency in a paper titled 'Bitcoin: A peer-to-Peer Electronic Cash System'

Reuters

On 22 May, 2010, the first ever real-world bitcoin transaction took place. Lazlo Hanyecz bought two pizzas for 10,000 bitcoins the equivalent of $90 million at today's prices

Lazlo Hanyecz

Bitcoin soon gained notoriety for its use on the dark web. The Silk Road marketplace, established in 2011, was the first of hundreds of sites to offer illegal drugs and services in exchange for bitcoin

On 29 October, 2013, the first ever bitcoin ATM was installed in a coffee shop in Vancouver, Canada. The machine allowed people to exchange bitcoins for cash

REUTERS/Dimitris Michalakis

The world's biggest bitcoin exchange, MtGox, filed for bankruptcy in February 2014 after losing almost 750,000 of its customers bitcoins. At the time, this was around 7 per cent of all bitcoins and the market inevitably crashed

Getty Images

In 2015, Australian police raided the home of Craig Wright after the entrepreneur claimed he was Satoshi Nakamoto. He later rescinded the claim

Getty Images

On 1 August, 2017, an unresolvable dispute within the bitcoin community saw the network split. The fork of bitcoin's underlying blockchain technology spawned a new cryptocurrency: Bitcoin cash

REUTERS

Towards the end of 2017, the price of bitcoin surged to almost $20,000. This represented a 1,300 per cent increase from its price at the start of the year

Reuters

In a six-part blog published from letters he wrote inprison, Ulbrichtapplied a form of market analysis known as Elliott Wave Theory to predict new all-time highs for bitcoin.

The theory forecasts the highs and lows in financial market cycles by identifying extremes in investor psychology, which in the case of bitcoin appear to be far more tempormental compared to traditional markets due to the nacency of the cryptocurrency.

Ross Ulbricht, was sentenced to life in prison after a federal jury in Manhattan found him guilty in February of charges including conspiracy to commit drug trafficking, money laundering and computer hacking. (Reuters)

The principle posits that price movements in speculative markets are driven by investor expectation, which when combined with mass psychology can force prices artificially higher through a positive feedback loop of buyer optimism.

Looking at the previous price waves of bitcoin, Ulbricht puts the next big wave reaching between $93,000 and $109,000 before the 17 February, 2021. He notes that his speculation should be considered with appropriate scepticism.

We have a price target... of ~$100,000 some time in or near 2020, he wrote. However, there is no rule that market moves have to be proportional. This is just a patter we see unfolding that may or may not continue.

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Notorious dark web criminal makes $100k bitcoin price prediction from prison - The Independent

domestic gpu cripto mining rig on wall with selective focus.

2019 has been a relatively good year for miners, generating $5.4 billion in total revenue. But, according to the year-end report of CoinShares, one country has dominated bitcoin mining throughout the year more than any other.

The research paper entitled "The Bitcoin Mining Network", which explores trends, average creation costs, electricity consumption and sources in bitcoin mining, discovered that nearly 65 percent of bitcoin hashrate originates from China.

"Regardless of the reasons, the effect is that the current Chinese hashrate ratio is likely higher than in June 2019. While we expect this ratio to fall again as latest generation hardware further makes its way into the non-Chinese market, at the time of writing, as much as 65% of Bitcoin hashpower resides within China the highest weve seen since we began our network monitoring in late 2017," the report read.

For many years, China has consistently been a major market for bitcoin miners due to its cheap electricity and affordable resources. Companies like Bitmain, F2Pool, and Canaan that account for a large portion of the Bitcoin network's hashrate are all based in China.

Distribution of the Bitcoin network's hashrate (Source: Blockchain.com)

However, in April, the National Development and Reform Commission (NDRC) of China included bitcoin mining on a list of industries it plans to phase out over time. The unexpected move of the Chinese government left mining companies wondering the future of China's mining sector.

In a strange turn of events, following Chinese President Xi Jinping's call for increased efforts in blockchain development, China essentially unbanned bitcoin mining in the last quarter of 2019.

Since then, China's bitcoin mining sector has prospered. Eventually, it recovered from a slow several months in mid-2019 to establish dominance over the cryptocurrency mining industry once again.

Whether much of the Bitcoin network's hashrate coming from China is necessarily negative or positive depends on perspective. But, as a purely permissionless and decentralized network, it is always favorable to have more geographically distributed hashrate.

In the hardware side, the dominance of Bitmain has started to subside, which opens the space up for increased competition. Companies like Hut8, Bitfury, and Canaan are competing to take the top spot in the bitcoin mining sector.

"Since our last report in June 2019, we estimate that Bitmains market share by hashrate has fallen from ~70% to ~66%. To add context, Bitmains own estimates (via Frost and Sullivan) claim that as recently as in in 2017, their market share was around 75%," said the CoinShares research team.

Hence, while the dominance of China in bitcoin mining has increased, in the hardware department, the industry has begun to see a more competitive environment.

The expansion of major mining facilities to other major mountainous areas such as Washington, British Columbia, and Norway also serve as signs that the geographical distribution of bitcoin hashrate will improve over time, as the sector evolves.

"Among these regions we find the major mining centres of: Washington and New York States in the United States; British Columbia, Alberta, Newfoundland & Labrador, and Quebec Provinces of Canada; Iceland; Northern Scandinavia (Norway and Sweden); The Caucasus (Georgia and Armenia); the Siberian Federal District of Russia; Yunnan and most importantly of all regions, Sichuan provinces of China," CoinShares researchers wrote.

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New Report Shows China Dominates Bitcoin Mining, Is This a Sign of Worry? - Forbes

Two weeks ago, Bitcoin completed a 61.8% Fibonacci retracement ($7,231.40) off the June high as it fell to a low of $6,526. That low put it 52.9% below the 2019 peak.

Bull Flag pattern

The price correction since the June high has been normal and well-constructed, forming a potential bull flag trend continuation pattern. This can be seen as the falling parallel trend channel in the enclosed charts.

BTC/USD Weekly Chart

Given the significant advance in the first half of the year, and the related signs of a trend change from bearish to bullish, Bitcoin has a good chance of eventually triggering a continuation of the new bull trend. The 2019 rally exceeded several prior swing highs and the 10-week exponential moving average (ema) crossed back above the 34-week ema.

Have we seen the bottom?

The question now is, has the bottom of the retracement been reached or might Bitcoin pullback further than it has so far? Theres no way to know this ahead of time but we can identify some important price levels to watch going forward.

As long as price stays above the $6,526 swing low, there is a chance for an upside breakout of the bull flag. If the falling trend channel is to further evolve and retain its general shape, a move up to at least the top trend line seems possible in the near-term.

BTC/USD Daily Chart

A decisive daily close above the downtrend line is the first sign that a bullish breakout of the flag could be in the works. At that point, additional signs of strength will be needed. Watch for a daily close above the most recent swing high of $10,540.49 for confirmation of a bullish breakout. There is also a monthly high at $9,600 from November. Bitcoin has not had a move above a prior month high since the June peak. A move above a prior month high would be an additional sign of a change in the downtrend pattern, to an uptrend.

If we see further weakness

Alternatively, notice that the 10-week ema has just crossed below the 34-week ema, after being above it since early-May. By itself this is bearish, and supports a bearish scenario if Bitcoin falls below the most recent swing low, thereby triggering a continuation of the downtrend off the 2019 high. If that occurs, next watch for signs of support around the $5,900 to $5,427 (78.6% Fibonacci retracement) price zone, and then for indications of a bottom and subsequent bullish reversal.

Bruce Powers, CMT

This article was originally posted on FX Empire

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When Might Bitcoin Be Ready To Resume Its Bull Trend? - Yahoo Finance

Photo by Chesnot

It will seem strange to many but there are a lot of people preparing for the end of the world. Its not just the prepper community that has Armageddon anxiety, its quite a common thing. Who is to blame anyone for expecting the worst when the media pours out a never-ending flood of doom and gloom and desperately upsetting news? You must be desensitized, thick skinned, tough as nails or extremely carefree to be able to consume what the media throws at you and not end up at least taking some notice of the never-ending cascade of end of times news stories.

If global warning isnt going to get us, an asteroid isnt going to strike, a plague thawing from Siberian ice sheets about to scythe us down, it will be the civil war in America, the collapse of the dollar, peak oil, no oxygen in the oceans, the 1%, a pantheon of local and international politicians, terrorists, dirty bombs and perhaps the much predicted second coming itself that will holocaust.

Its not surprising that there is a whole demi-monde of enterprises supplying the salve to an anxious audience.

A one years worth of food supply for four people can be yours for only $5,000.

Not many people take their end of the world survival that seriously and it would make for a tricky storage problem for a city dweller, who might have to sacrifice their second bedroom or all available closet space to have such reserves close at hand. So for many, the answer is to stick gold in a sock, as the only ticket out of trouble after the mobs are marauding after the plague-carrying asteroid has struck.

Sadly, this is a bad miscalculation, as many sad cases discovered during the second world war. A gold coin might buy you a bar of soap or nothing at all if the nightmare scenario some are delirious about were to strike.

Gold is not good for much in extreme circumstances.

If you are going to go down this road of planning for the worst you need to think in terms of gradients.

Level 1. Economic dislocation

Bitcoin, gold, silver: If you lay this in for such an outcome, when it strokes all these instruments will spike. In a 2007-2008 crisis the key issue is counterparty risk. Bitcoin (BTC) and platinum group metals (PMGs) are a good way of keeping your assets out of the hands of counterparties that might implode. Bitcoin is faster to transact and easier to hold than gold and silver but it makes sense to hold some of all.

Level 2. Personal dislocation

Bitcoin: Need to bug out, because the walls are closing in? Bitcoin is the way to go. Taking much gold through the airport is not going to work.

Level 3. Widespread war

Bitcoin, gold and silver: Silver is probably a favorite here because silver, especially silver coins are great for small transactions. Gold is too high value for most transactions and flashy. Bitcoin is useful because it can work globally and is an easy carry.

Level 4. The losing side of widespread war

Bitcoin and some silver: The risk of being plundered or having it appropriated is high, so once again BTC comes out on top.

Level 5. The Big one

As the nuclear winter falls, the plague ridden zombies make their final onslaught as the aliens black smoke sweeps all, there is probably no point in preparing.

Yet if you want to prepare, bags of old silver dimes, a bag of 1/10oz gold eagles and an SD card with bitcoin on it, is the way to go.

Like almost all predictions, doom-laden predictions at some time might prove right enough that you are happy you have 1% of your portfolio positioned for a ghastly emergency. The worse that emergency would get the higher the value of that small chunk of your portfolio would become.

It is not necessary to have half a ton of silver in your basement (approximately $500,000) but if the future of mankind is troubling you, it might make sense to sock away some silver, gold and bitcoin if that buys you some peace of mind. Peace of mind is after all a big fat dividend that pays out all year.

-

Clem Chambers is the CEO of private investors websiteADVFN.com and author of 101 Ways to Pick Stock Market Winners and Trading Cryptocurrencies: A Beginners Guide.

In 2018, Chambers won Journalist of the Year in the Business Market Commentary category in the State Street U.K. Institutional Press Awards.

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Bitcoin, Gold, Silver And Armageddon - Forbes

Key Takeaways

As Bitcoins price lugs in the $7,000 region for the 3rd week in a row, the U.S. and other European miners are taking hits due to mining unprofitability. A few days before Bitcoin collapsed from the $8,000 region, a total of ~$17 million BTC moved out of miners wallet, indicating miner capitulation. Since its drop to the $6,515 on November 25, the price has not revived completely.

At press time, BTC moved sideways priced at $7,195 with a market cap of $130 billion. The next move for Bitcoin is as predictable as a coin toss: the chances are 50-50.

The 4-hour chart showed two strong overhead resistances for Bitcoin since October 28. At present, there are multiple supports and hence variable outcomes for Bitcoin.

The first outcome is a Symmetrical Triangle which could push the price of Bitcoin either way.

The second outcome is a Descending Trianglewhich has a higher chance of pushing Bitcoin further below, perhaps, even retest $6,515.

The price has consistently formed lower highs, which exudes bearish presence; there are, however, formations of higher lows, indicating resisting bulls. The bearish signs seen on MACD and RSI push the probability in favor of bears.

The Fibonacci Tool showed the price crawled up below the last second level, $7,433 [23.6%], indicating chances of the next drop retesting the $6,515 level.

The overhead resistances starting from October 28, 30, are presenting a challenge for the buyers, hence the lower highs for BTC. Moreover, tweaking the horizontal support, we get a descending triangle, which inherently has a bearish bias.

Factoring other indicators like the downtrend which has loomed over Bitcoin since June 26, the bearish case gets stronger. Another reliable indicator, VPVR, indicates that BTCs price is hanging by a thread and that further bearish pressure could cause it to slip further below.

For both of the above formations, BTC shows a bearish bias and hence converges toward an incoming dump in the near future. Supporting this theory and hence catalyzing these outcomes is the Death Cross, which has loomed over Bitcoin since October 25. The bearish scenario would allow the price of BTC to retest the $6,515 lows. Dipping as low as $6,200 in the next week. Further bearish momentum should logically cause a steeper move to $5,920.

Since Bitcoins rallies are out of the blue, there is a rather slim chance that could defy all the technical indications and could take BTC higher. Although unlikely, if it does occur, the price would be immediately stopped at $8,000.

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Bitcoins grim future indicates a retest of $6,515 and perhaps lower - AMBCrypto

Bitcoin (BTC) has been paralyzed at $7,200 since Thursday. The first digital asset attempted a recovery towards $7,600 at the beginning of the week. However, the upside momentum proved to be unsustainable as the price retreated to the lower boundary of the recent consolidation channel. At the time of writing, BTC/USD is changing hands at $7,202, mostly unchanged both on a day-to-day basis and since the beginning of Friday.

Low volatility and non-existent trading activity confined the market to tight ranges, but the situation may change ahead of the weekend. We are moving towards the holiday season, which is often characterized by low liquidity conditions. It means that the market may be vulnerable to sharp exaggerated movements. Many traders might start taking their money off the table to avoid losses.

Historically, Bitcoin tends to grow ahead of Christmas. This trend is often referred to as Santa's rally. However, there is no guarantee that this year the history will repeat.

If we zoom out to the weekly chart, we can clearly see that BTC/USD is moving within a downside channel. In October, the similar consolidation pattern of three doji candles ended in a strong recovery, though the trend remained unbroken. This time we may see similar momentum with the price recovering towards $9,000-$9,100 during the pre-Christmas week. This movement will qualify for Santa's rally. However, we will need to see a sustainable move above $9,150 (the sloping trendline) for the recovery to gain traction in the long run and put the current bearish trend at risk.

On the downside, once $7,000 is broken, the sell-off may extendtowards $6,550. This support area is created by a combination of the lower line of the weekly Bollinger Band and the lowest level of the previous week. We will need to see a sustainable move below this handle for the downside move to gain traction with the next focus on psychological $6,000 and $5,000 (SMA200 weekly).

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Bitcoin may jump to $9,100 ahead of Christmas - FXStreet

For the past few days, Bitcoin price (BTC) has ranged between $7,400 to $7,100 and it seems bears are keen to push the price back below $7,000 before this week closes.

Earlier in the week, MATIC made headlines after dropping more than 60% in the span of a few minutes and a few other Binance IEO tokens followed with double-digit losses.

Fast forward to today and many altcoins are back to producing double-digit gains on their BTC pairs. At the time of writing FunFair (FUN) is up 26.6%, WAVES 15.31% and THETA 12.36% and thats just pointing out a select few.

Crypto market weekly performance. Source: Coin360

Meanwhile, Bitcoin appears bearish on the 1-hour to the weekly timeframe and barring quick day trades the price action leans towards bears and pales in comparison to what is happening with altcoins.

Interestingly, despite Bitcoins bearish bias, Bitfinex longs have increased significantly (56%) since Nov. 22 and this shows that many traders believe the decrease in selling pressure and the last major drop to $6,530 on Nov. 25 was the bottom.

The current price action suggests otherwise, and savvy traders will recall what usually happens when either long or short positions skyrocket.

BTC USD Longs chart. Source: TradingView

In the event that BTC falls below $7,080 and $6,800, many analysts expect the price to drop to $6,500 where the price made a local bottom on Nov. 25. This would place Bitcoin price at the lower descending channel trendline. However, the volume profile visible range (VPVR) shows a lack of support in this area.

BTC USD daily chart. Source: TradingView

In the daily timeframe, the moving average convergence divergence histogram (MACD) shows momentum beginning to wane and the signal line has flattened as the price is pinched between $7,150 and $7,300.

As mentioned in the previous analysis, the VPVR suggests that demand does not really kick in until $6,000 and more so around $5,530.

Willy Woos Bitcoin NVT Signal shows Bitcoins realized price at $5,619 just a hair away from the $5,530 high volume node of the VPVR and $89 away from Bitcoins realized value at $5,619.

Bitcoin NVT Signal. Source: charts.woodbull.com

Regarding Bitcoins short-term price action, the digital asset continues to post lower highs and is capped below the 12-period exponential moving average (EMA).

BTC USD 6-hour chart. Source: TradingView

The $7,300 level is proving to be tough resistance to overcome and currently $7,150 and $7,080 are acting as support. If Bitcoin fails to hold these levels, the next expected step is a drop to $6,800.

Before opening a position, traders should look for the price to cross above the 12-EMA and the previous lower high at $7,400.

BTC USD weekly chart. Source: TradingView

A glance at the weekly timeframe also shows BTC/USD hovering slightly above the 100-WMA ($7,000) for the second week in a row. $7,600 is clearly shown as a point of challenge and any high volume breakout will need to sustain above this level.

The lower Bollinger Band arm lines up with the bottom descending channel trendline at $6,466 and as mentioned earlier, $5,330 appears to be the next strong level of support.

Throughout this week, traders should keep an eye on the $7,080 price level and the BTC/USD Longs at Bitfinex.

The views and opinions expressed here are solely those of the author (@HorusHughes) and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

The rest is here:
Why Bitcoin Price Is Headed to 7-Month Low If $7K Support Fails - Cointelegraph