Cryptoverse-Holding your breath for a bitcoin bounce
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Loading... - Facundo Gonzalez
- 19 Jul 2022
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If you're waiting for a bitcoin recovery, you may have to sweat it out for months. That's the conclusion of some technical specialists seeking method from the madness.
Bitcoin's slide since May, swamped by economic angst, has knocked it below its 200-week moving average, at around 2,911,315 ARS, as well as its 200-day moving average around 4,573,284 ARS .
It's now been moving relatively sideways for more than a month, hovering close to the 200-week moving average.
Valkyrie Investments, for one, says its research is pointing to an upside move - but that it isn't clear when.
"Historically we've accumulated (around the 200-week average) for three to six months," said Josh Olszewicz, Valkyrie's head of research, referring to a period of sideways trading before a price break upwards.
Between late 2018 and early-2019, bitcoin spent nearly three months straddling the 200-week moving average.
In a gloomier scenario, though, bitcoin may not rally for about a year, Olszewicz added.
Moving averages smooth out wild price fluctuations to clean up the signal, or at least that's the idea. Traders use longer-dated averages to find the next support or resistance levels.
Yet chart analysis based on historical price patterns is far from an exact science, particularly when it comes to the young, fast and furious history of crypto.
Some other technical indicators are signaling a wide range of potential levels of support for bitcoin, ranging from 2,576,498 ARS to1,545,899 ARS - suggesting that the world's biggest cryptocurrency could plunge anew.
This week, bitcoin is cruising just above its 2017 peak, but is over 68% below its all-time high of 8,953,332 ARS hit last November.
'FOUR STEPS DOWN, ONE UP'
Some see a pattern in the recent slump.
"The market is in a bear channel that started back in May," said Eddie Tofpik, head of technical analysis at ADM Investor Services International. "It seems it is in a four steps down and one step up mode at the moment."
Fibonacci retracement patterns, which aim to identify support and resistance levels, suggest bitcoin has found a moderate level of support between 2,512,086 ARS and 2,576,498 ARS , said Patrick Reid, co-founder of FX consultancy the Adamis Principle. Read More...
