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article imageBitcoin crashes to a new low for over a year below $5,000 today

By Ken Hanly     Nov 19, 2018 in Technology
Bitcoin (BTC) set a new low for the year today dropping as low as $4,951 before a slight recovery. This is lower than it has been for over a year. It remains to be seen if the price has hit a bottom yet.
CoinDesk analysis
Omkar Godpole has his usual analysis on CoinDesk last updated at 15:50 UTC today. BTC has gone even lower since he posted the analysis. He notes that BTC fell to a low of $5,165 early today which was its lowest level since October of last year. Last week it had just breached the key support level of $6,000. Bitcoin's crash was part of a broader decline among the top cryptocurrencies.
As the Godpole article went to press, Bitcoin was trading at $5,283 down a full five percent on a 24-hour basis and 16 percent over a week according to the Bitcoin Price Index (BPI) of CoinDesk. As of November 19th 2017 BTC was trading above $7,600 so the yearly loss is at 32 percent.
Ether, Cardano, and Tron all suffered double-digit losses over the last 24 hours. Etherium (ETH) the third largest coin by cap fell to $155 early today the lowest level since July 16 last year according to CoinMarketCap data. XRP the second largest by cap reported a 6.5 percent drop. Only nine in the top 100 coins are trading in the green with three of them being stablecoins tied to fiat currencies.
The total market capitalization of cryptocurrencies has fallen to a 13-month low of just $172 billion. Just during the last five days the cap has declined by more than $30 billion. Risk aversion could even increase according to signs on the technical charts.
Chart analysis
On the weekly chart, BTC closed last week at $5,560 and this confirmed a downside break of the 9-month long descending channel indicating a bearish continuation. The close was also below the 100-week exponential moving average (EMA) that has acted as support as far back as June. The 50-week EMA has also shed its bullish outlook. As well, the 12-week relative strength index RSI at 37.00 indicates there is room for even a bigger sell off.
BTC risks falling below the psychological support level of $5,000 soon. The next major support level is around $4,000 which is the trendline that connects the January 2015 and April 2017 lows.
However, on the daily chart the RSI is only 15 indicating that in the near term the sell-off is overdone and hence a sustained break below the $5,000 level is unlikely for now.
The 4-hour chart shows the RSI is creating a higher low, despite the lower low on the price chart, and this marks the development of a bullish divergence. If the RSI continues to post higher lows and the 4-hour candle closes in the green this could pave the way for a corrective rally.
Godpole's outlook
Based on his technical analysis Godpole's view is: "The bearish weekly close has likely set the tone for a drop below $5,000. In the short-run, however, BTC may defend that psychological support level, courtesy of the oversold conditions on the daily chart.
A minor corrective rally to $5,800 may be in the offing, but that could reinvigorate the bears and bring a sustained drop towards the long-term rising trendline support, currently seen at $4,100.A move above the former support-turned-resistance of $6,000 would invalidate the bearish setup."
Present situation
So far today the low has been $4,951 but it has risen back up over the key $5,000 level. At 11:35 Central Standard Time it was at $5,042. It does seem as if the price has not found acceptance below the $5,000 level as Godpole suggests. However, there is no sign yet of a recovery rally. However, the day is not over. So far BTC has lost over $500 dollars over the last 24-hour period with a drop of over 9 percent. A more recent price of BTC can be found here.
UPDATE: Bitcoin has now dropped as low as $4,708 but has recovered somewhat. It is still below $5,000.
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