- Bitcoin settles above $6,400, but the upside momentum is fading away.
- Arthur Hayes says Bitcoin may repeat the history of 2014 and 2015.
Bitcoin is changing hands at $6,405, off Sunday’s high at $6,464. The digital coin No. 1 regained ground above $6,400 handle, though it looks vulnerable to downside correction as the recovery failed to gain traction.
Bears won’t let Bitcoin go
The research team of Hong Kong-based BitMEX has recently published the latest “Crypto Trader Digest” edition. According to BitMEX’s CEO, Arthur Hayes Bitcoin may repeat its “nuclear bear market” of 2014 and 2015.
Hayes believes that all markets – cryptocurrency is no exception here – pass through several phases, and Bitcoin has yet to reach the bottom before it can proceed to the recovery phase. He says that the bear market that started on March 12, when Bitocin price moved under DMA200, will continue at least until 2019.”
The key consideration of “calling the bottom” is the price action around the last gasp of the bears.
“You will know it when you see it. And the best part is, you probably will be too chicken to click that oh so scary Buy button,” Hayes writes in the report, saying that Bitcoin can come close to $2,000 before it starts to reverse.
This would be a 75% drop from $9,152, which is the starting point of the bear market.
Bitcoin’s technical picture.
On the intraday chart, BTC/USD is supported by $6,400-$6,380 congestion zone that served as a lower border of a consolidation channel at the end of October. If it is cleared, the sell-off may be extended towards $6,359 (SMA50, 1-hour chart) and $6,333 (SMA200, 1-hour chart). The next important support lies with the psychological $6,300. Once below, the downside may continue towards $6,200.
On the upside, the upper line of the recent channel at $6,460 serves as a strong resistance that was not broken at an initial attempt on Sunday. A sustainable move higher will open the way to $6,500. The Relative Strength Index (RSI) points down, which implies that the risks are tilted to the downside.
BTC/USD, 1-hour chart