Sorry — But Bitcoin Can Still Drop to $2.7K While Everyone’s Bullish
As the #Bitcoin price (BTC) begins to slowly ascend, the question on everyone’s minds is whether the latest bottom is in, or whether there is more pain ahead.
In this article, I will aim to provide some insight as to what one can expect based on the information from the charts.
In last week’s analysis, I pointed out that the CME gap was higher than the weekend price, 7% higher in fact, and as expected this gap was filled on Dec. 4 as a $560 candle appeared out of nowhere taking the price from around $7,240 to $7,800 in a matter of minutes.
One thing that is worth noting here is that although the Bitcoin price experienced this explosive move, the price was only maintained for a few hours, before returning to its previous level. With this in mind, let’s consider the gap that needs to be filled this forthcoming week.
The Bitcoin price closed on the CME Futures charts at $7,495, and at the time of writing this Sunday evening, Bitcoin is trading at around $7,514. With barely any difference in the price this week, the CME gap filling will not be something so easy to spot unless, of course, the price of Bitcoin continues to rise.
If Bitcoin gains $200-$300 or higher throughout the week, those in longs should keep an eye on $7,495 to avoid any unpleasant repercussions. But what else could be in store this week?
Again, looking at last week’s outlook, the moving average divergence convergence (MACD) indicator looked poised for a bullish cross. As can be seen from the chart above, the cross occurred marking the end of the current bearish trend that the digital asset had been experiencing since the MACD crossed bearishly on Nov. 9.
Whilst the MACD cannot give an expected duration for the next bullish phase, it is at least moving in a northbound direction for the time being. What one would hope to see next is this being replicated on higher time frames as it is the weekly MACD that spells elation or doom.
The weekly MACD is quite possibly the best indicator one can use when attempting to time when to buy and sell Bitcoin. Since October 2016, there have been just 8 crosses.