For the first time since February, a leading technical indicator for the bitcoin price is generating heavy sell signals. The bitcoin price is expected to take a dip before recovering next week with a price consolidation, possibly in the region of $11,000 and above.
The bear cross can be seen from an assessment of the Moving Average Convergence Divergence metric – ‘MACD’. This indicator is used to identify trends and patterns in price movements. It recently printed a value of -25, indicating a price dip to $9,000 and possibly lower. This is the first time it has been seen since this February and is a trend that many traders will jump on.
These trends gain momentum – as more and more traders identify and assess these trends, the price can go even lower due to the increased sell positions. By the time that it becomes common knowledge, it is often too late and the price will rebound, which is expected to happen next week. The MACD bearish crossover is highly indicative of a downtrend leading to a reduction in the bitcoin price.
For the past two months, Bitcoin has been in and around the $10,000 mark. And when it dips below this region, it has found a number of traders willing to take positions to the upside. This has led to recovery rallies, albeit weak ones. If the price does stay near the $10,000 mark for an extended period, it could be a positive sign. We might be closer to finding the true value of BTC.
If the Bitcoin price rises about $10,900, we could be set for an upside breakout, which would invalidate the lower highs found on the weekly charts. However, the inability of the Bitcoin price to maintain a strong bounce from the 100-day moving average could be a cause of concern for those invested in the appreciation of the cryptocurrency.
This is a very reliable indicator and one that is quite clear in its meaning. We have already started to see the downturn. It’s also quite rare to see it, the last time being February. While the trading realm is hard to ascertain, sometimes there are obvious opportunities. However, charting the exact low and how far it will descend can be difficult. And it’s easy to place a sell position at a time when it starts to move upward. Timing is everything in the market.
Over the long-term, the bitcoin price is expected to appreciate. It has fundamental attributes which could assist an increase in adoption and real-world use, aside from purely speculative purposes. But currently, the bitcoin price is dictated by speculators hoping to make a profit from its sporadic movements. Until this changes and retail trade volume increases, its base price will remain hard to predict.