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How Low will Bitcoin Go?
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Bitcoin continues to look bearish this week, but there are still opportunities, even in this kind of market. Right now you can get double earnings on lending on Liquid, perfect for the HODLers. If you're looking to trade, there are always options during a downtrend. Stay calm, be patient, pick your spots.Bitcoin continues move down
Bitcoin’s descending channel was decisively broken at USD3,620 last week while a key support turned into resistance.
If BTC is unable to break above and form a support on this yellow trendline, we could very well be in for another leg downward to sub-USD3,000 levels.
Since then, Bitcoin has formed a double bottom in the USD3,200 range, which is a new yearly low for the top cryptocurrency by market capitalization.
Over the past week, BTC has seen a bullish relief rally in this clear downtrend, and has actually managed to break the descending yellow trendline highlighted last week.
But BTC was unable to gather enough bullish momentum to break through the red trendline, which also happens to be the upper side of a huge symmetrical triangle.
Symmetrical triangles typically reflect periods of consolidation before continuing on with the previous trend. In this case, BTC has been in a clear downtrend, so there was a high probability of this symmetrical triangle breaking down to sub-USD3,200 levels – and that’s exactly what has happened today.
In the image below, you can see Bitcoin breaking out of the symmetrical triangle (red arrow) and landing in the USD3,200 demand zone, which also happens to be the yearly low for 2018.
When BTC touched this on December 8, there was a large reaction to the upside. However, the most recent USD3,200 support test is much more bearish, considering the steep downside slope of the preceding symmetrical triangle.
Will Bitcoin hold this support level?
At this point, we’ll have to see if BTC can hold the support level at USD3,200. Two key areas to watch over the next few days are USD3,200 and USD3,400.
If BTC touches USD3,400 and is unable to break through the break point of the preceding symmetrical triangle, we’ll likely be in for another leg to the downside.
If BTC is able to find support at USD3.400, that will signal a bear trap and give the bulls a moment of relief to prepare for a larger move to the upside.
Finally, BTC could simply break through USD3,200 without even retesting the break of support at USD3,400 – this would be the most bearish scenario.
It’s important to keep in mind that symmetrical triangles often result in a target that matches the widest point of the triangle percentage-wise. In this case, that figure would be approximately 17%, which would put a theoretical target for a continuation trend precisely at USD2,800 – a price that has been widely circulated recently.
XRP and ETH follow BTC's price action
Over the past week, XRP and Ethereum shared Bitcoin’s price action. XRP also broke out of a symmetrical triangle, while ETH just broke out of an established trendline.
In terms of support bounces, XRP managed to bounce about 1.5% higher than the recent local low at USD0.2865, while ETH managed to form a low 3% higher than its yearly low at USD81.00.
This suggests that XRP and ETH are holding up better than BTC during this drop.
Quick analysis of EOS, BCH and BSV
Despite the recent onslaught of negative news regarding dapp hacks and claims of centralization, EOS managed to form a 20% bullish rally after falling to USD1.50 on December 8 – a price that hadn’t been seen November 2017.
The Bitcoin Cash war continues as BCH and BSV continues to exhibit large levels of volatility. At the time of writing, BCH has once again surpassed BSV in market cap rankings. Out of the Top 10 cryptocurrencies BCH and BSV experienced the largest losses over the last 7 days with declines of ~14% and ~27%, respectively.
Read our blog on how to survive the bear market.