Bitcoin [BTC] price has failed to break above the 200-Day Moving Average for bullish confirmation. It presented two shorting opportunities last week above $8500 and $8300. The price started to dip below $8000 on 15th October 2019.
The price of Bitcoin at 8: 45 hours UTC on 20th October 2019 is $7915. It is trading 4.5% lower on a weekly scale.
The downtrend is also triggering other bearish signals (death cross between moving averages). While crypto-analysts see a lot of support below current levels, gold buff Peter Schiff calls a drop to $2000. The basis of his analysis is the head and shoulders pattern formed on the daily chart beginning in May.
The Bitcoin chart looks horrible. Not only does the flag that followed the recent breakdown project a move to $6K, but we are close to completing the right shoulder of a head and shoulders top, with a $14K head, and neck line just below $8K, that projects a collapse to below $2K!
The analysis is tremendously scary for a crypto investor. It looks legit as well, however, there are many mistakes cited by crypto-experts on it. Crypto-trader Josh Rager tweeted,
Imagine believing that you can actually predict the price of Bitcoin on high time frame charts by using H&S patterns
The head and shoulders pattern requires confirmation of break below support. Moreover, that alone is not a confirmation of the absolute target as Fibonacci retracement levels and prior support levels are important to consider as well.
Fundamentals Trumps Technical Analysis
Bitcoin is a highly volatile asset with a comparatively lower market capitalization than traditional assets. Hence, fundamental growth or adverse news has a greater effect on its price. Moreover, in the current macroeconomic environment, all currencies are facing a downtrend.
Prominent crypto analyst and trader tweeted on Schiff’s analysis, he called his analysis outright “wrong.”
Money Management trumps Fundamentals, Fundamentals trumps Technical. Peter Schiff says he owns no Bitcoin (poor Money Management), is wrong on Bitcoin Fundamentals, and TA alone is a very poor investment strategy.
The trading volume at Bitcoin spot exchanges and derivatives market (trust funds and futures) are painting a rather grim picture. Mati Greenspan, the Senior Market Analyst at eToro noted in one of his recent mailers that the trading volume has been down across all platforms including BitMex, CME and Local Bitcoins.
The count of the transactions is also consistent above April 2019 levels. However, it has been estimated that 25% of the transactions are sent via Veriblock. The on-chain adjusted realized value of Bitcoin transactions has also slipped below $1 billion in October (first since May 2019).
Nevertheless, the total hash rate for mining Bitcoin is at an all-time high. A lot of the selling pressures could be accounted for that. However, it is a positive fundamental indicator of Bitcoin.
While the speculators seem to have distanced themselves for the market, the growth around Bitcoin has been consistent. However, a break below the swing low at $7715 could trigger another drop a drop below $7000. Crypto-analyst sees support at $6300-$6700 levels.
Last but not least, the 200-Day Moving average has moved above $8800. Hence, on a bullish move, a bounce to test that resistance is also probable.
Do you think that Bitcoin will break below $7000? Please share your views with us.
The post Bitcoin [BTC] @ $2000 Predicts Peter Schiff, Crypto Experts Disagree But Still Bearish appeared first on Coingape.