HOME CATEGORIES WRITE AND EARN 🔍
CATEGORIES WRITE AND EARN MORE

CRYPTO NEWS

Your favorite crypto news blog

Echo Bubble Analysis Suggests Bitcoin Price to Fall to $5,000

Bitcoin 2019/11/25 02:30 by Nick Chong

If you’ve perused Crypto Twitter at all over the past months, you’ve likely seen the term “Bitcoin echo bubble” mentioned over and over again; bears of BTC and its ilk believe that the cryptocurrency market is in the midst of effectively a “do-over” of 2018’s Crypto Winter.

Related Reading: Crypto Tidbits: Bitcoin Dives Under $8,000, Fidelity Bags Trust License, SEC Takes Second Look at ETF

While some have laughed this off as pure conjecture, citing the fundamental developments of the cryptocurrency ecosystem and adoption events, there are some technical analyses backing the idea that Bitcoin is in the midst of an echo bubble, and will thus fall further from $7,100, where BTC trades today.

Bitcoin to Close Under Key Level

Trader Walter Wyckoff recently made a simple though astounding revelation: if Bitcoin closes the week on Sunday under $7,500, the price will have settled under the 100-week moving average, a key indicator of long-term support. This is important as the last time BTC closed under this support level, the cryptocurrency’s price fell by 35% in the three weeks that followed.

If history repeats, Bitcoin could drop to the high-$4,000s or low-$5,000s and then bottom from there, then begin its next leg higher.

What’s interesting is that $5,000 is where a number of analysts, not just Walter, expect for BTC to find a long-term bottom. Per previous reports from NewsBTC, an analyst going by Mac remarked that $5,100 will be the ultimate bottom of this recent downtrend because there exists a key confluence of support levels at that level: the double-month volume-weighted average price, a “price inefficiency fill” level, and the 200-week moving average.

A 35% drop to $5,000 also corroborates 888Velvet’s analysis, in which he called the recent drop from $8,000 to $6,700 over a week ago. The analyst’s chart implies that Bitcoin will bottom somewhere in the $5,000s or $6,000s — just as the abovementioned analyses expect too.

Not so Fast 

While there seems to be downside momentum, there is one indicator signifying that the bottom may be here. This is the Bitcoin Fear & Greed Index, which factors in a fair mix of volatility, market momentum and volume, social media trends, surveys, dominance, and Google Trends.

The Index printed a 23, which is on the “extreme fear” side of the oscillating indicator, just today. The reading of 23, and thus “extreme fear,” are relevant because many believe that emotions drive markets, especially the cryptocurrency market. As analyst RektCapital wrote in a recent blog post:

“Human psychology tends to be predictably irrational because many people tend to react similarly in certain contexts
 Baron Rothschild made a fortune by buying when others sold in panic. His philosophy was to ‘Buy when there’s blood in the streets.’ Because the greater the fear — the larger the opportunity for profit.

Related Reading | Uncommon Bitcoin Metric Suggests Massive Profit Taking Is Underway 
Featured Image from Shutterstock

The post Echo Bubble Analysis Suggests Bitcoin Price to Fall to $5,000 appeared first on NewsBTC.

0 Like(s)



You should also read...

Bitcoin 03/04/20 21:30 by Tony Spilotro
Current Bitcoin Buy Pressure Dwarves Early 2020 Rally to Over $10K
Bitcoin price may be trading as much as 40% lower than it was at the start of they year, but the low prices are causing significantly more buy pressure in the cryptocurrency market than the massive ea...
Read More
Bitcoin 29/06/20 00:00 by Nick Chong
The Signal That Marked Bitcoin’s 2019 and 2020 Highs Has Yet to Flash
There are many analysts saying that Bitcoin looks like it’s at a medium-term high. As reported by NewsBTC previously, a trader said that the cryptocurrency is trading in a textbook “distri...
Read More
Bitcoin 31/07/20 19:00 by Tony Spilotro
What To Expect If Bitcoin Forms Three White Soldiers On Weekly Timeframes
Bitcoin price this week exploded through resistance at $10,000 and blasted to a high of $11,400. The cryptocurrency is now consolidating below that level, gearing up for what one crypto analyst expect...
Read More
Bitcoin 23/09/20 18:00 by Cole Petersen
This Analysis Suggests December Will Be a Crucial Month for Bitcoin
Bitcoin’s price action has done little to offer investors with clarity into its near-term outlook. The benchmark digital asset has been trading around $10,500 for the past few days, with each push h...
Read More
Bitcoin 21/10/20 18:00 by Cole Petersen
Bitcoin Could Soon Post First Weekly Close Above $12,000 Since 2018
Bitcoin is currently in the throes of a strong uptrend that has allowed it to recapture all of the gains that were lost following its decline from $12,400 seen in late-August. The cryptocurrency set f...
Read More