Following a dip into the mid $6k zone as predicted, Bitcoin has recovered back above $7k. Analysts have been looking at trend lines to determine if there is any hope of a Thanksgiving or Christmas rally.
Talking Bitcoin Trends
Following its big dump to $6,550 earlier this week, Bitcoin has returned to its consolidation zone in the low $7,000s. The asset has moved back above the 50 hour moving average and has been sideways for a couple of days facing resistance above $7,200.
Since the same time last week BTC has lost 12% and the charts are still looking ugly. The 200 day moving average appears to be leveling out and could start to turn south if the down trend continues. The last time it did this was in May 2018 and a year of losses followed.
The weekly chart is also looking ugly with the first candle forming below the 50 week moving average since April. The 200 week MA which provided major support during the crypto winter is currently at $5k which could be the ultimate bottom for this bear movement.
Analysts and traders have been eyeing trend lines for the possibility of a rally for Thanksgiving or Christmas. Josh Rager has pulled out a five year chart noting that Bitcoin is still in a strong uptrend, but that line is now being tested.
Linear charts in the shorter time frames are largely bearish but longer term logarithmic projections remain bullish. A bounce off support at 2018’s most traded price, $6,500, could signal that this was the bottom. Bitcoin needs to hold above $7k for a few days though if any further gains are to be measured.
Trend lines can be measured any which way you please as these two charts indicate. One is extremely bearish and the other shows the complete opposite.
The Bitcoin fear and greed index is still planted in the ‘extreme fear’ zone suggesting that there is still strong bearish sentiment. The doom merchants have predictably emerged from their caves to spread their FUD as they do every time BTC posts major declines.
Not all are completely negative though as the Bollinger Bands inventor himself, John Bollinger, remains bullish for Thanksgiving week;
“Turkey week bottom in crypto space? The setup is looking good. $BTCUSD”
Elsewhere on Crypto Markets
The rest of the altcoins are still blindly following their big brother and have bounced off their recent bottom. Total market capitalization hit its lowest level for seven months on Monday with a dump to $180 billion.
Since then crypto markets have returned to $197 billion as a slight recovery occurs across the crypto space. Further consolidation needs to take place around the $200 billion level before any ‘Santa rally’ can be considered.