Bitcoin Is Bottoming, Right Now, It’s Time To Get In

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Bitcoin Is Bottoming, Right Now, It’s Time To Get In

It Looks Like Bitcoin Is Bottoming

After a long and protracted 3.5 month consolidation process it looks like Bitcoin is bottoming. The token fell to hit an almost four-month low over the weekend and has since bounced back. The bounce-back is not super strong, it didn’t form a double-digit percentage increase, but it doesn’t have to. Bitcoin is confirming support at an important price level and set up to rally.

Support is near the $7,800 level. This level was resistance in June and the location of an important technical consolidation. The consolidation formed during the summer rally, as the entire cryptomarket was getting a boost from the Litecoin Halving, and resulted in the July break-out and rally. This price level is important because it represents a shift of market sentiment. No longer are the 2020-Bears in control.

The weekly chart is still bearish. The indicators suggest selling may persist in the near term but there are caveats. Don’t get to bearish. Stochastic for one is already in oversold territory so it is unlikely price action will move much lower without a break-down of BTC fundamentals. Momentum is likewise bearish but weak and not suggestive of market conviction. If price action were to fall it would take a significant amount of work on the bears part and, if successful, would result in a sharp decline possibly as low $6,000.

In terms of fundamentals, Bitcoin’s hashrate and dominance continue to trend skyward. Dominance is hanging around 67% to 70% right now while the hashrate is hanging just under a very-recently set all-time high. These metrics are indicative of a market gearing up for next year’s Halving, an event I expect will drive BTC to a new all-time high. Until then, traders should keep a close eye on today’s support levels because it could be the starting point for the Halving-Rally.

If prices move higher as I suspect they will the first target for resistance is the short-term moving average. Once price action moves above the EMA a move up to the top of the narrowing consolidation range near $9,500 is probable. Once price action breaks out of the triangle pattern a new rally will be able to start and it may drive prices up to $13,000 by the end of the year.

Here’s What’s Really Happening In The Bitcoin (BTC) Markets Right Now

January 18, 2020

It’s fair to say that action over the first few days of this week in the cryptocurrency markets has been a bloodbath. Prices of all of the major coins declined by 50% or more in some cases and sentiment took a steep in the wake of the dip.

On Thursday, however, price is starting to recover. We’re seeing double-digit gains across the majority of the top twenty coins by market capitalization and sentiment, to a degree, is easing somewhat.

But the question on everyone’s lips is, what’s next?

And specifically, as relates to Bitcoin (BTC), is this the start of a longer-term bubble bursting scenario (as the mainstream media is suggesting) or are we seeing nothing more than a correction against the longer term trend and, in turn, does today’s action represent a bottoming out of said correction?

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Let’s try and answer these questions.

On December 17, 2020, BTC reached highs in and around $19,800 a coin. By December 22, this had dipped to around $13,200 a piece – a dip of almost exactly one third in market capitalization across the five-day period.

BTC Daily Chart

At lows on Wednesday, January 17, BTC broke through the $10,000 floor to post lows at $9,650. These lows are around 25% off the above mentioned $13,200 price, and represent a more than 50% dip from all-time highs.

In a traditional equities environment, this sort of decline would be tough to see as anything but an outright collapse. This is cryptocurrency, however, and anyone that’s held bitcoin for more than a year or so will be all too familiar with these sorts of dips. Price fell more than 33% back at the start of September last year. BTC dipped 25% back in May, 2020. Again, a 25% dip came back in June 2020. A 35% dip took place at the start of January, 2020. At the end of 2020, price fell from $1131 to around $550. That’s a dip almost exactly the same size as the one we’ve just seen.

The key point here is that this sort of correction is nothing new in the bitcoin space. The only difference this time around is that more people are talking about it because major news outlets now feature the crypto ecosystem as part of their daily coverage.

When you get this sort of increased coverage, it increases participation and, in turn, amplifies the severity of any corrective activity. People who got in late last year see price decline, see Bloomberg report that the bitcoin bubble is bursting and sell out. This panic selling compounds the bearish action and tacks another 10-20% onto any fundamentally driven decline.

When you look at it this way, then, things aren’t even as bad as they have been on numerous occasions across the last two years.

So what’s a holder to do?

There’s really only one answer to this – keep holding.

You don’t need to be Warren Buffett to recognize that selling out now is an emotionally driven, reckless move. Sure you’ll be cutting losses if this coin goes to zero, but it’s not going to zero. Chances are what we are seeing right now is the bottom of a long overdue correction and, in turn, a period that just needs to be weathered by crypto holders.

To go back to Buffett, he’s a firm believer that you should be greedy when others are fearful and, vice versa, fearful when others are greedy. The crypto market, and especially as relates to bitcoin, just went from greedy to fearful. If Buffett were a crypto investor (which, as he’s pointed out on numerous occasions, he’s not), he’d be buying up as many cheap coins as his exchange limits would allow him right now.

We will be updating our subscribers as soon as we know more. For the latest on BTC, sign up below!

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

Image courtesy of GlobalCoinReprt archives/Flickr

Ripple: XRP Price Lost 95% in 2 Years — Is It Time Now to Get Bullish?

XRP price slid below $0.20, the lowest level in over two years — but could this be the perfect investment opportunity or should more downside be expected?

Altcoins dropped severely during the recent retracement of Bitcoin (BTC) price to $6,400, which increased Bitcoin’s dominance above 70%. One of these coins is XRP, which took a hit of 20% and is currently valued at $0.19 per coin — or the lowest value in over two years — after hitting as low as $0.178.

Crypto market daily performance. Source: Coin360

Nevertheless, the blockchain payments firm behind XRP, Ripple, just announced that it raised another $200 million in funding. Aside from that, they claimed to have ”the strongest year of growth to date in 2020.”

But the question for XRP now is whether the current lows provide a perfect investment opportunity, or will the top-3 altcoin continue to lose ground? Let’s take a look at the charts to spot the trend.

XRP hits lowest USD value in 26 months

Unfortunately for XRP holders, the trend remains the same since the last article: still trending downwards, posting lower lows and lower highs.

XRP USD 3-day chart. Source: TradingView

As XRP made a bearish retest of the $0.30 level, the price retraced further and is currently resting on the next significant support around $0.17-0.20. This is the lowest level since October 2020 and is also a full retrace of the massive move during peak mania in early 2020 with a high of around $3.

Now, the sentiment is hitting euphoria levels for bears as people can’t see any bullish perspectives for the coin anymore.

But does this mean that XRP is a great opportunity right now? No. However, maximum investment opportunity typically occurs when prices are not showing the progress of the asset or project itself yet; and this just may be the case with XRP.

Fractals start to line up

Markets move in similar ways, mostly based on human emotions and market psychology. That’s why it’s interesting to look at fractals and earlier cycles. Similarly, the bubble of 2020 in Bitcoin and the “dot com bubble” are comparable in their pattern itself.

XRP USD 3-day chart. Source: TradingView

Checking the complete graph of XRP, the chart is divided into two periods. One through 2020, and the other one since the big jump in 2020.

In the first period, the price moved between two significant levels for almost two years, between $0.005 and $0.009. There has only been one moment when the price moved below this range in December 2020/January 2020.

If we analyze that in relation to where Bitcoin was at this point, we can see that the given drop coincided with Bitcoin finding its bottom from the first parabolic move.

BTC USD 3-day chart. Source: TradingView

Interestingly enough, the price of XRP has been hovering in a similar range for more than a year before it broke south. This breakdown is leading to a test of the next support level (the blue horizontal line, similar to the one in the previous cycle), which could suggest that XRP itself is nearing its cyclic bottom.

Moreover, if you compare the recent movements of BTC with XRP, Bitcoin is now potentially bottoming once more from its first parabolic move (and possibly out of the bear market).

However, one should not assume that the current period is just like 2020 — the same level of euphoria just isn’t there. There’s also not nearly the same amount of new retail traders entering the market right now.

Today, it’s mostly the left-over people from 2020 and early adopters that are sticking around — similar to the period at the beginning of 2020. Thus, it would make more sense to compare fractals with 2020 rather than 2020.

XRP retracing back to the bottom of BTC pair

The XRP/BTC pair, in particular, is not showing much strength after losing major support. This level broke due to the volatility of Bitcoin but it was critical nonetheless for XRP. Then a retracement happened to the next support zone, which must now hold if XRP wants to prevent itself from making new lows.

XRP BTC 1-day chart. Source: TradingView

Based on the overall XRP/BTC chart, a conclusion can be drawn that XRP is still showing significant bullish divergences on higher time frames for a potential trend reversal. However, one caveat is that the green zone must hold to justify these bullish divergences.

XRP BTC 3-day chart. Source: TradingView

As the chart shows, the green area is a zone that has served as support and resistance throughout each cycle. If this zone is unable to support price at this point, XRP is likely to move down towards the next red zone area around 1,200-1,300 satoshis.

Additionally, a more preferable move would be setting a slightly higher low in this zone for a potential uptrend and continuation of the bullish divergences.

Looking forward

Holding XRP in the past few years didn’t bring the return people were looking for as the price retraced 94.80% since the peak in January 2020.

So does this mean that shorting XRP is a wise strategy here? I don’t believe it is.

Fundamentally, the firm behind XRP is continuing to move forward and pursue their plans, as sentiment couldn’t be more bearish. Generally, the highest returns are made from investments contrary to the sentiment, which can flip quickly with just a few green candles.

However, it is crucial for XRP to hold the 2,500-2,600 (BTC) satoshi level as support and seek to find bullish divergences or support at $0.19-0.20. If this level holds as support, the risk/reward potential for longing XRP will be much higher than shorting it.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

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