Bitcoin lost 7% in just one hour on Thursday after it resisted to stay above the $4000 mark. Is price heading for another $3000 hit? The following give insights from technical analysis perspective.
January 10, 2019 | AtoZ Markets – Since recovering from 3100 to hit 4000 late December, Bitcoin has re-tested this psychology price level twice. The Crypto market has lacked needed momentum to cause a real recovery. The market is still looking attracted to the downside as it finds a clear bottom to build on. The talks of building better institutions and having a strong regulation for the industry is still very loud. Cryptos are still subject to cyber thefts like we saw recently when 1.5 million Ethereum classic was stolen. Even Crypto wallets are not exempted – 200+ Bitcoin was stolen from Electrum wallet late December. It looks like the road for a major recovery is not yet clear. Bitcoin still maintains over 50% market dominance and remains the benchmark for the Crypto market. Its market capitalization still averages $70 billion and poses an average volume of $5 billion in the last one week according CoinMarketCap.
Bitcoin started this year modestly well, with a 7% gain to hit close to 4300. From technical point of view, price was about to complete an inverse head and shoulder pattern with neckline at 4200. A break above 4200 was expected to see price rally to 5000-5500. Even if this happens, a major recovery is still not yet confirmed until there is an impulse wave rally to 6000-7000 zone (where the November breakout happened). For clear reasons, it might just be another bounce as has been in the over one year of this bearish phase. To take away some of the optimism, a 7% dip happened on Thursday (today) in just one hour after price lacked the bull-power to launch a break above the 4200 neckline. What next?
Bitcoin Technical Analysis: What Next?
The current bearish move could continue to 3200 – close to 3100 low. A break below 3100 low would definitely see us counting a new bearish impulse wave from 4200 with the next target at 1800. If the dip is kept above 3100, a fast rally could happen above 4000 up to 5000 before the next big dip sends price below 3100. The bulls have not shown enough strength so far and it's only a matter of time to know if there will be a new low or otherwise.
Where do you see Bitcoin in the coming weeks? Please share your thoughts with us in the comment box below.