Bitcoin is going down. It is in a bear market.
That is bad news if you are a short-term holder and good news if you are a long term acquirer.
I reiterate, all you need to know is while way Bitcoin is going in the long term to develop a very profitable strategy for Bitcoin. Get the direction wrong and you will lose. If you don’t ‘know’ the direction, you are ill advised to play.
I believe the direction iws up and significantly up, but for now in the short term it is down.
Now to get a view of how things can pan out its best to remove as much noise as possible. The easy way to do this is to use moving averages. The trouble is everyone is doing that tends to weaken the useful ness of that tool. Anyway here is BTC with a 200 moving day average, which is the long term indicator many watch.
Classically the current break down would be considered bearish. I’m not a fan of moving averages because they change with the current price as it changes, so that leaves a misleading trail. They also tell you after the event that things are bearish. Not the moving average says the market is moving up on average and only gave a sell hugely below the high. In volatile markets this is a chronic problem.
So what I sometimes do is ‘doctor’ the chart manually to de noise it. The recent sharp rise and fall is pure noise:
Something hit the price then an even (the President of China spoke on Blockchain) poked it up. These events are outside of ‘the trend’ so lets imagine they didn’t happen. Like a soviet political artist, lets airbrush these inconvenient events from history.
You get this:
Now that’s a pretty clear picture. Bitcoin is tanking towards a capitulation. That bottom looks to be quite near in terms of time but the bottom is hard to call. Here are some ideas:
I think the high and low bounds are unlikely but you cant really guess or for that matter buy the low because a capitulation, even though it looks important on the chart later, is often an ephemeral moment that only exists for minutes and trades little volume.
To reverse this trend will not take much but to do so will need a catalyst and there is none in sight at the moment. Instead there looks to be a hodlers opportunity to get some cheap coins coming up.