…as a matter of fact, not only is it not out, it may be prepping for a major upward breakout, as shown by technical analysis. Why is it then only trading around the $6.3k mark now, its short-term bullish bias history and the bears sharpening their claws in the background?
The general hype surrounding the price of the biggest and most popular crypto currency went on quite a rollercoaster ride over the last handful of days. The reason we’re specifically saying “the hype” is that the price itself did not exactly reflect particularly high volatility.
In fact, all it really did was to mount a sort of mock-charge on a significant resistance level in the $6.7k area, but then retreated to lows lower than prior to the said charge.
Clearly, the move heralded as a break towards the $7k level, fell well short of the mark, and with BTC now hovering around $6,350, a close below the 10-day MA is in the rearview mirror. What that means is the above said short-term bullish bias is now officially dead. What’s more, the path has apparently been opened for the hungry bears to barge in and to chomp down on the price some more.
All that is only valid for the short-term though. Yes, we may see some more downward movement, but there’s a silver lining in all this gloom and doom too.
The first clue that something bigger may be in the long-term works, bullish breakout-wise, is the fact that not only did the price hold well above the June 24 low of $5,755, it didn’t even really dip close to the psychological support level of $6,000.
If this state of affairs is maintained for the next couple of days, an inverse head-and-shoulders pattern (considered to be a major bullish indication) may indeed materialize, and if it does, the bulls will likely be back in command, more firmly than last time.
The problem for now is though many of the short-term technical indicators favor the bears. The 5-day and 10-day MAs for instance, have recently turned southward on the daily chart, even as the RSI has begun favoring the bears as well.
The story told by the short-term charts though is a different one. According to the 4-hour RSI, the price has already entered oversold territory, which means that going below $6,000 looks like quite a long-shot now.
Bouncing off $6k would be the start of the bullish march. Its confirmation however looks quite unlikely right now: to breach the neckline resistance, it would take nothing less than to power past the $6,832 mark, with high trading volumes no less.
What do the fundamentals say though?
Surely, a push from the side of the fundamentals could have a major effect on the evolution of the price, now that it is teetering on the edge.
The Bank of Finland is apparently no fan of cryptocurrencies and while in and of itself, that state of affairs is hardly surprising, it put out a paper written by an advisor, according to which, the very concept of cryptocurrency is a fallacy.
According to this distinguished expert, cryptocurrencies aren’t even real currencies. What they are is apparently nothing more than an accounting mechanism for assets that do not actually exist.
The author goes on to surmise that cryptocurrencies will never become real money nor will they ever replace real money without institutional support.
Whether or not the Bank agrees with the conclusions drawn in the paper is unclear. The bank of Finland has classified BTC as a commodity, back in 2014.
Meanwhile, on the other side of the continent, British regulators are preparing for the imminent coming of the crypto world…