Bitcoin dropped back below 4,000 after making its way above it first time in three weeks. Will there be a new low or the recovery will continue?
February 28, 2019 | AtoZ Markets – Cryptocurrencies got another hit last Sunday. Many believe the dips in prices was as a result of the negative comments fromWarren Buffetts. The great investor has been one of the biggest bears of the digital currency market and it seems he’s not changing his views yet. Despite the price dips, crypto market has been stable this year so far but how long will it keep up? Bitcoin gained 25% from 7th February to hit close to 4,200 – its highest this year. Market capitalizations and trade volumes have increased in equal proportions with prices across all the major cryptos.
There is probably a consensus among crypto technical analysts and traders concerning total market recovery since Bitcoin bottomed last year at 3,100. Price will have to make its way into the 6,000-7,000 territory to even start the talk of a major recovery. In 2018, after the first dips between January and late February, BTC price stayed between 6,000 and 7,000 for 9 months to complete a really large triangle pattern. It broke downside in November and hit a new low. Something similar should happen on the way up – first a gradual rally to 6,000-7,000. So far, price still remains below 4,000 and might even reach a new low. This might just be one of the many minor bounces that we saw throughout the bearish run in 2018.
BTCUSD Technical Analysis – Bearish or Bullish?
Bitcoin has the potential to become what it was designed to be. A major recovery leading to higher prices than $20,000 is very possible. However for this to happen, the currenct bearish trend has to end.
The rally from 3,100 could be seen from two scenarios. First, an impulse wave burst above 4,600 leading into the 6,000-7,000 zone. This scenario is required for bullish recovery and would signal that price had already bottomed at 3,100. Alternatively, an a-b-c corrective pattern ending below 4,600 leading to a new low. Any of these scenarios could still play out but the a-b-c scenario is more likely especially if price does not recover from this week dip early enough. If price continues below 3,600 instead, a new low is very much likely to happen below 2,500. The gloom days might not be over after all.
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