Disclaimer: This article is not intended as an investment advise and published for educational purposes only. BTC markets are highly volatile and risky in nature. DYOR before making any investment decision rather than listening to a stranger over the internet.
Bitcoin continues its downtrend despite strong fundamental news coming out suggesting bears’ strong hold over the entire crypto market.
Bitcoin bear market started after it’s meteoric rise to an all-time high of $ 19,981 in December 2017 and recorded a yearly low of $ 5,790 on 29 June 2018, a decline of approximately 71%. The total market capitalization has also dropped by almost 70.5% from the ATH of 795 Billion USD to 234 Billion USD, a figure provided by Coinmarketcap.
The short to medium term trend remains downwards with plenty of room to decline further; however, there could be price retracements or corrections along the way until BTC finds a bottom. BTC closed below $ 6K on daily which is a bearish signal, 6K was the level bulls had been defending since Feb 2018; a weekly and monthly close below $ 6,000 will reiterate the downtrend and $ 6K can act as a strong resistance in the future.
There are many short-term support levels between $ 6,000 – 5,000 as indicated by the above chart: the white dotted lines show historical support levels, there are some Moving Average Lines, and Fibonacci Levels creating a confluence of interim support levels. All these levels will slow down the price but expect a steady grind to $5K. The On-Balance-Volume (OBV) is declining, suggesting the flight of capital and there is no sign of capitulation phase yet. The Bollinger Bands are pointing downwards which is also an indication of the bear market continuation. The bounces at support levels are getting smaller and smaller showing the market weakness, the trading volume is declining, and volatility is diminishing. RSI has floored indicating that the market is oversold but it can stay at that level for some time. All the bullish divergences on higher time frames have failed to produce any significant rally. The long vs short ratio has increased, and the possibility of a long squeeze is more likely than a short squeeze. All these indicators point out no buyers’ interest yet and prices must decline further to reach a level which is more attracting for smart money.
The market moves will be boring in the coming days and weeks, with little volatility until it determines a direction. Since markets do not move in a straight line, expect some upward movements along the way before it continues down. At as today, the critical levels to watch is the price range of $ 4,500- 5,000, a strong bounce can be expected at those levels.
There are a few other elements investors should watch which can potentially reverse the bear trend immediately such as the SEC investigation into BTC price manipulation and approval of BTC Exchange-Traded Fund (ETF). Although the ETF approval by the SEC could be one of the strongest news BTC ever had and will potentially lead BTC to a new ATH, the chances of approval in near future are low but it can come when we will be least expecting it.
Summary:
- BTC remains in a bear market until it finds a bottom until indicators point at the market capitulation,
- Expect low volatility and slow grinding throughout July 2018.
- Look out for strong fundamental news such as SEC investigation on BTC price manipulation and/or approval of BTC Exchange-Traded Fund (ETF), this news can reverse the downtrend at any price level.
