The recent bearish trend in the cryptocurrency ecosystem could spell “game over” for bitcoin, according to a renowned market analyst who’s recently revealed he has a bearish stance, based on technical indicators.
Jeff DeGraaf, head of technical research at Renaissance Macro Research, has recently made a case for shorting the flagship cryptocurrencies if it broke through a “key year-to-date support level,” according to CNBC.
The analyst, in a note sent to clients, argued a top usually develops, in the form of a descending triangle, after months of reduced volatility and little fanfare. In the note, after adding that “parabolic moves are notoriously dangerous for short sellers,” he added:
Once the top is complete on the support violation, the security in question can often be considered permanently impaired or even 'game‐over'. We are of course referencing Bitcoin as exhibit 'A' in today's market.
A chart included in the note seemingly points to a close little under the $6,000 mark, at about $5,600-$5,800, a support line that BTC has tested numerous times this year, and that helped it recover every time.
At press time the cryptocurrency is trading at about $6,455 after surging over 3.2% in the last 24-hour period. It is now seemingly recovering from a slump that saw it crash from well over $7,000 to about $6,000.
Bitcoin has tested its support under $6,000 for the first time after falling from a near $20,000 all-time high in mid-December. The cryptocurrency’s most recent price decline came after the US Securities and Exchange Commission (SEC) set September 30 as the deadline for a decision regarding the VanEck SolidX bitcoin ETF.
In response to the market’s reaction the founder and CEO of crypto-focused investment firm Pantera Capital, Dan Morehead, claimed that investors should be focused on the Intercontinental Exchange (ICE)’s announcement about its upcoming cryptocurrency platform Bakkt.
Bakkt, as covered, will help boost cryptocurrency adoption through a partnership with Microsoft and Starbucks, as it’s set to help businesses accepts cryptocurrencies like bitcoin, and will feature a one-day physically settled bitcoin futures contract.
Notably DeGraaf is seen as one of the most respected chart technicians on Wall Street. Per the Renaissance Macro Research’s website, he has been ranked the number one technical analyst by Institutional Investor Magazine more than 10 times over his career, and is a member of Institutional Investor’s Research Hall of Fame.