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Bitcoin Selloff Could be Over, Says this Technical Indicator

The massive Bitcoin selloff that has characterized most of the market in 2018 might soon be at an end based on the data from a technical indicator. If correct, the top-ranked cryptocurrency may experience a substantial price rally in the last quarter of the year.

Technical Indicator Shows Imminent Bitcoin Trend Reversal

According to Bloomberg, Bitcoin traders might soon experience an end to the selloff of the cryptocurrency. This is based on a technical signal – the GTI VERA Convergence Divergence Indicator. Data from this indicator points towards a trend reversal for Bitcoin that would excite many BTC bulls who have been disconsolate for most of 2018.

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Historically speaking, the GTI VERA Convergence Divergence Indicator has performed well in the past especially with trend reversals. The last time the indicator pointed towards a trend reversal, Bitcoin recovered from a significant dip to increase by almost 40 percent the following month.

The GTI VERA Convergence Divergence Indicator works by detecting trend reversals, as well as trend exhaustion. The indicator does this by using the moving average convergence divergence (MACD) via its proprietary volatility explosion relatively adjusted (VERA) theory.

Similar Predictions by Other Indicators

Apart from the GTI VERA Convergence Divergence Indicator, other market indicators have also come to the same conclusions. In late June and early July 2018, two separate indicators also pointed to a trend reversal for the top-ranked cryptocurrency based on a predicted end to the massive selloffs.

First was the Williams Percentage R (WLPR) indicator which determines whether an asset (in this case, BTC) is overbought or oversold. At the time, the WLPR revealed an immediate reversal of the BTC price downtrend. The second was the Divergence Analysis (DVAN) Buying and Selling Pressure indicator which also pointed to BTC being oversold.

July turned out to be a decent month for BTC based on price performance as the top-ranked cryptocurrency rose from below $6,000 to eclipse the $8,400 – its highest price level in two months at the time. Since then the Bitcoin price experienced decline as August began, taking its price below $6,000 once more. As at press time, Bitcoin is trading at $6,400 despite the negative news from the SEC on Wednesday, rejecting three ETF filings.

Do you think the Bitcoin selloff is over, based on the data from the GTI VERA Convergence Divergence Indicator? Keep the conversation going in the comment section below.

Image courtesy of Bloomberg and Coinmarketcap.

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Bitcoin May Fall to $2,500 Before it Rebounds

The price of Bitcoin continues to take a tumble. The number one cryptocurrency according to market capitalization continues to experience a tumultuous 2018. One expert even predicts that BTC may bottom out at $2,500 as the crypto market continues to struggle.

Bitcoin Hovers Above $6,000

More than a week ago, BTC dropped $1,000 (from $7,700 to $6,700) in the space of a few hours as a wave of selloffs hit the market. The period coincided with the Coinrail hack as well as the U.S. government demand for information from top exchange platforms on suspicion of price manipulation.

In the past few days, BTC has experienced some degree of recovery, but all that was wiped away on June 21 as prices fell below $6,500. At the time of writing this article, Bitcoin is trading slightly above the $6,100 with a seven percent decline in the last 24 hours.

Signs of Bottoming as Bitcoin Selling Becomes Exhausted

In a recent CNBC article, Bill Baruch, the President of Blue Line Futures said that Bitcoin is approaching its bottom level. According to him, there are signs that the volatility of the market is “depressed.” Baruch also revealed that the BTC sales market has become supersaturated.

Fears of two back-to-back cryptocurrency exchange hacks may have pushed retail investors over the edge. The market is to stranger to panic selling at the slightest hint of a crisis. Conversely, Janine Wolf of Bloomberg declared recently that there is no end in sight for the current downtrend, saying:

According to the Directional Movement Index, bitcoin is on its strongest negative trend since the sell-off earlier this year. The index’s ADX line is currently at 39.3. Anything above 25 is considered a strong trend. Meanwhile, the index’s DVAN trend line, a divergence analysis that measures buying or selling pressure, is also giving off ominous signals.

Bitcoin Can Fall to $2,500 and Still Rebound to $14,000

No matter the extent to which BTC falls, experts like Luis Carranza, the founder of London Fintech Week believes Bitcoin will bounce back, saying:

Crypto is unpredictable. There are massive spikes and drops. $4500 could be the bottom, but nothing is preventing $2500 from being the bottom.

Bitcoin optimists point to the emergence of regulatory clarity and the influx of institutional investments as reasons why BTC will recover. Commenting on the role of clear regulations in the market, Gavin Pannu of the London Academy of Trading said:

Central Bankers have been quiet during the cryptocurrency bull-run and have been doing their due diligence with research and white papers carried out by regulators and experts in the field, and the market is anticipating an optimistic view from Central Banks. Regulating cryptocurrency would ease investors’ concerns.

On the subject of institutional money coming into the market, experts like Matthew Newton of eToro believe it breathes new life into the industry. According to Newton, the presence of large investors in the market is an “important development” in the crypto world. Notable names like Goldman Sachs and Nasdaq have made significant inroads into cryptocurrency in recent months. However, Newton believes that the proper regulations will make big money flow into the market, saying:

For institutions to fully commit, they’ll need more structured products and some sort of regulatory oversight. Reputational risk is a big issue for them, as is overcoming the media skepticism. Once an appropriate regulatory framework is in place, big-ticket money is likely to follow suit swiftly.

What is your Bitcoin bottom price prediction? Do you think BTC will attain the heights reached in late 2017? Keep the conversation going in the comment section below.

Image courtesy of the CoinMarketCap.

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