Earlier this morning we reported on bitcoin’s price breaking through the US$5,000 range throughout a few Asian markets. Western exchanges reached a weighted average high of $4,980 per BTC. Shortly after bitcoin’s new all time high, the price started to dive hard, taking its biggest loss in less than two months losing over $300 in value.
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After Reaching $5K, Bitcoin Bears Take the Reigns
Bitcoin climbed the mountain to the $5K territory on a few eastern exchanges yesterday exciting bitcoin proponents everywhere. However, following the highs, bitcoin’s price dropped seven legs down to a low of $4,475 per BTC. Bitcoin’s market capitalization shaved off $6.5B in a matter of no time, and while panic selling to ensued, it caused a negative wave to shudder the top twenty altcoins as well. At press time the price per bitcoin is trying to hold above the $4,550 mark, but bears have control over the market right now. At press time using Bitcoin.com’s price index, BTC is hovering around the $4,570-4,590 range.
Two weeks ago news.Bitcoin.com reported on the Goldman Sachs technical analyst, Sheba Jafari, calling bitcoin’s top at $4800. The analyst also said that the market would follow a significant bear market reaching a low of $2,221. The price exceeded her prediction capturing $4,980-$5,000, but many wonder if a bear market will come, or if it’s a standard 20-30 percent correction as usual. Bitcoin markets have been running up $500 steps at a time quite often and then usually dipping 30 percent to begin consolidating again.
Looking at the charts technical indicators like the Relative Strength Index (RSI) is started to head south as it looks like bulls are exhausted. However, the 100 Simple Moving Average (SMA) is still well above the 200 SMA trendline which means we could see the uptrend gain momentum again in the short term. Stochastic last night had shown overbought conditions, but that should be expected as the price was extremely high it was just a matter of when the sell off would begin. At the time of writing, there’s some serious trading going on as volumes have pushed higher since last night with a 24-hour average of $3B. Looking at the order books on Bitstamp there are huge sell walls at $4,750 and above so it will take bulls some time to chew through the orders.
Overall bitcoiners are pretty chipper, to say the least as the fall in value is just another day in bitcoin-land. The quarreling about Segwit2x and the competition with bitcoin cash fork is still in full form, but people seem a bit calmer now watching for technical performance to trump internet chatter. Of course, the price rise to the obtainable $5K (or close to that) gives everyone hope that bitcoin can easily do it again, and this time stay there. Asian markets currently have a fever for cryptocurrencies, and that doesn’t seem to be going away anytime soon.
Bear Scenario: At the moment we are inside the ‘bear scenario’ as bitcoin short sellers and those betting downwards have the reigns. Bulls are naturally stepping off to the sidelines to catch the lowest dips, and right now we could see lows in the $4,200-4,300 territory. There’s some solid foundation in this range, but it could break lower if bears manage to claw more weak hands during big sell offs.
Bull Scenario: A 20-30 percent dip is normal after spiking so high during typical market corrections. The $5K range or higher is definitely obtainable, and the market demonstrated this yesterday. Over the course of the next 24-hours bitcoin will find its low, and bulls will likely begin consolidating again. Fibonacci extensions show the price could jump into the $5,500 territory at full extension. However, all of this will be determined this weekend and what happens during the course of next week.
Where do you see the price of bitcoin heading from here? Let us know in the comments below.
Disclaimer: Bitcoin price articles and markets updates are intended for informational purposes only and should not to be considered as trading advice. Neither Bitcoin.com nor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Always remember that only those in possession of the private keys are in control of the “money.”