Bitcoin Reverses, Pumping 40% in One Day; Now What? – Price Analysis

  • Short term trend: Highly volatile price action, we may see more upside
  • Long term trend: Possible reversal effected, too soon to say

A monumental day has passed in the history of Bitcoin’s (BTC) market, with one of the most dramatic price fluctuations in recent memory. In little more than 24 hours, Bitcoin’s price shot up exactly 40% as a surge of buyers flooded in, presumably in an effort to respond to the threat of a serious and long term downtrend.

On the 12-hour chart, we see the basic situation over the last month and change. A downtrend was started in late September, when Bitcoin broke down from almost three months of consolidating price action. The second wave of that downtrend was started only a few days ago -- but yesterday’s dramatic price action could well have put paid to that trend, illustrating it as a now-completed correction of the 2019 high of near $14,000.

MewnBTC chart by TradingView

Looking on a daily chart, we see that Bitcoin’s drop never made it past the first strong support, derived from a May-June support from earlier in the year. BTC has rocketed back up through what had been support from July-September, now serving as a retest point within the developing trend.

Retesting old supportBTC chart by TradingView

We can see on the daily RSI that a bullishly diverging trend has been completely retaken after being briefly lost, with RSI back over 50. A massive amount of volume came in during the past day, and is still coming in: At time of writing, about 67,600 bitcoin worth have been traded since the reversal began (about $620 million) on Coinbase alone.

Finally, looking on the weekly chart, we see that the reversal could have some very important consequences for the long term trend -- if it sticks.

Some seriously nice looking indicatorsBTC chart by TradingView

Namely, the 55 EMA has been retaken easily, after serving as a very important support for the last month. And in general, the EMAs, which had started to collapse down on themselves bearishly, have with yesterday’s move begun to reverse course and avoid a bearish inversion. The histogram, which had broken a promising looking uptrending arch, is again looking like an uptrending arch, implying momentum swinging to the upside.

All of these are very important technical indicators, on a very important timeframe (the weekly) which before yesterday were looking really nasty. But if they close tomorrow anywhere near where they are now, they will be looking quite bullish.

The situation is extremely dynamic. Anything is possible here, even a complete re-reversal back to what was looking like a long term downtrend just settling in. But Bitcoin holds these prices until tomorrow, the indicators are going to look very positive as we head toward 2020.

The views and opinions expressed here do not reflect those of CryptoGlobe.com and do not constitute financial advice. Always do your own research.

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