Recovery after a bad week?
The price of bitcoin (BTC) dropped as low as $6,000 last week but was able to breach over $7,000 again on Monday. The price rose 5.23 percent from yesterday.
The price came close to or crossed the Death Cross
Simply put, the Death Cross is when a stock’s 50-day moving average crosses below the 200 day moving average (MA). The price of bitcoin came very close to doing that or according to some reports actually did so. It has done this before on several occasions but has managed to recover in all cases so far. When the cross occurs usually the price of the stock plummets. However, an oversold condition no doubt helped the price from dropping further.
Investopedia describes the death cross as follows: “The death cross can occur in individual stocks, within various funds, and when examining indices and averages. Considered a bearish signal within the market, a death cross occurs when the short-term, 50-day moving average, also called a price trend, crosses below the long-term, 200-day moving average. It is named a death cross due to the X shape it makes when the trend is charted and is often considered a sign of further losses for a particular stock.”
The pattern has been as well that when the relative strength index (RSI) falls below 30 bitcoin tends to recover as is the case now.
Investopedia explains the relative strength index(RSI) as follows: “The relative strength index (RSI) is a momentum indicator developed by noted technical analyst Welles Wilder, that compares the magnitude of recent gains and losses over a specified time period to measure speed and change of price movements of a security. It is primarily used to attempt to identify overbought or oversold conditions in the trading of an asset.”
Cryptocurrency market in general down last week
All major coins lost a significant amount of their market cap as their price declined over a relatively short period of time.
Fears of regulation plus security breaches may be frightening away investors. Some Americans may be selling the coins for tax reasons such as to pay capital gains taxes. There appears to be a general unease about investing in cryptocurrencies.
According to Express.co.uk about $40 billion in value has been lost of the total value of cryptocurrencies during the last three months.
Will there now be a bullish trend?
An article in the Express suggests that bulls will takeover from the bears. The article claims that a clear break over $7,100 could be a sign of a rally to $7,600 and there could be further gains.
The article warns that it is unwise to write off bitcoin and claims that all things considered the price of bitcoin could be on the rise again. So far there is no evidence that the price will keep rising. It appears to rise only to fall back again.
Coindesk’s analysis
A Coindesk article claims that the death cross actually happened over the weekend but that the oversold condition resulted in no further drop.
After the analysis of several charts Coindesk takes the following view for the future price for bitcoin(BTC): ” BTC seems to have made a temporary low at $6,425. A clear break above $7,100 could yield a rally to $7,600. Further gains cannot be ruled out, but will likely happen only after the 5-day MA and 10-day MA have shed bearish bias. On the downside, $6,425 is an immediate support, which if breached, would allow a re-test of the February low of $6,000. However, the bears will have a tough time taking out support $6,425, courtesy of short-term oversold conditions.”
Present situation
Around 19:50 UTC bitcoin was trading at 6,974 just short of the $7,000 mark a rise of 2.31 percent from the opening. At the opening the price of BTC was $6,816 and its high today so far was $7,108 and the low $6,775. The price is quite volatile. You can check the present price here.
A very bullish outlook is provided in the appended video!
