This year has been a tough one for the cryptocurrency. After Bitcoin reached its one time high of $20,000 things haven’t been the same. That’s the nice way of putting it, in reality, the whole market throughout 2018 has been awful with a few short-lived bull-runs to give false hope to those who invested during December last year.
Over the past few weeks, we have seen Bitcoin jumping between the $4,000 and $3,800 regions and yesterday, we saw the leading cryptocurrency nearly hit it’s the lowest level of this year before an upside correction. Despite this, Bitcoin is still moving with a short-term bearish trend.
As written by FX Street:
“The area above the current price is packed by technical resistance levels, including SMA50 (1-hour) that stopped the most recent recovery attempt. The next hurdle is created by $3,900-$3,920 congestion zone and SMA100, 1-hour, followed by psychological $4,000.”
In terms of the future perspective, the coin also seems to be locked into a bear trend. According to the data from Directional Movement Index (used to define the market), The current sell-off is the strongest since the collapse registered in the middle of the year when Bitcoin fell from $9,300 to around $6,600.
Mike McGlone, a technical analyst believes that this setup suggests that there will be more turmoil for Bitcoin and the rest of the market on the way. The leading cryptocurrency might even get as low as 60 percent from its current price leaving it at $1,500. McGlone said, "there’s little to prevent fading Bitcoin prices from reaching the continuous mean of $1,500."
The analyst noted that many investors were quick to run during the hard fork for Bitcoin Cash while the end of the year sell off for tax reasons put the pressure on. In an interview with Bloomberg, the analyst said:
"We’re at a classic psychological stage where the market is reversing the 2017 frenzy. The hard fork was a key trigger that signalled the technology is way too nascent. You had these dicey characters threatening to destroy each other and institutions said ’It might be best if we stay away from this for a while."
What are your thoughts? Let us know what you think down below in the comments!