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Where is the price of Bitcoin going? The current period of stablecoins corresponds to that of early 2017

July 12, 2020

“What is the price of this bitcoin that you keep talking about?” A friend asks me. I look at my phone and it’s still averaging $ 9,200. “Almost the same as last month, buddy,” I replied.

The Bitcoin (BTC) price has barely moved an inch in the past six weeks and has barely moved 2% in either direction compared to the average price. I’m starting to think it’s a stable currency now.

The current “stable Bitcoin” period is similar in early 2017

This long period of static pricing, however, reminds me very much of early 2017 when Bitcoin held around $ 900 in the first three months of the year, followed by an explosive 300% move in the second quarter and then continued.

Where is the price of Bitcoin going? The current period of stablecoins corresponds to that of early 2017Where is the price of Bitcoin going? The current period of stablecoins corresponds to that of early 2017

Daily performance of the crypto market

Daily performance of the cryptocurrency market. Source: Coin360.com

The question I’m thinking now is whether we can really expect something like this to happen in 2020 when half the year is behind us, or whether Bitcoin has just outperformed and is waiting to fall.

Bitcoin’s downward trend

We all know that the first quarter of 2020 was brutal for Bitcoin. However, After the Black Thursday sale in March, the lucky people who shop below have already achieved an ROI of 180% of their investment.

It would be naive for anyone not to expect some of these people to make profits, so a period of consolidation is completely natural.

However, What makes BTC so different from other assets is the position that the miners are in. They have 50% less Bitcoin to sell than before, and the consolidation effect after the mini-rally has put BTC / USD in a downtrend.

BTC / USD 1-day chart

1-day chart of the BTC / USD pair. Source: TradingView

At the same time, Bitcoin is less than 1% from leaving this descending channel. Bitcoin’s current price is just under $ 9,300 and the downstream channel resistance on that day is only $ 9,350.

This puts mid-channel support at around $ 8,900 and final support before signaling another downward move at $ 8,350. From here on, all hopes of an immediate upward trend would be lost.

The Fibonacci approach

By zooming in on the weekly Bitcoin chart and drawing Fibonacci lines using the historical peak from 2017 to the 2019 floor, we can see that BTC has been hovering around the 0.382 fib for several weeks, sometimes crossing and crossing others.

BTC / USD 1 week chart

1-week chart of the BTC / USD pair. Source: TradingView

When trading Fibonacci, consider the following levels as potential targets. Once the 0.382 level is broken after rising to 0.236, the next level is 0.5 or 50% Fib, which is $ 11,500.

If the $ 9,250, 0.382 can become support in the coming week, then the bears are in a bad time. Conversely, Bitcoin is still far from finding new support at 0.236 if the $ 8,350 support is not valid, and the target is $ 7,000.

The MACD shows signs of reversal.

BTC / USD 1 week MACD chart

1 week BTC / USD pair MACD chart Source: TradingView

In the technical analysis last week, the weekly moving average for convergence / divergence (MACD) looked very “weak” and prone to a bearish transition. A crossover up or down in the weekly MACD are important points for Bitcoin. You just have to look at the history of the price action versus the MACD to see that this is the only indicator you need to time your Bitcoin buying and selling.

However, thanks to last week’s Altcoins mini-season, interest in Bitcoin seems to be increasing, which is reflected in the blue line of the MACD that is changing its trajectory from bottom to top.

Exposing MACD in this way in shorter periods of time is a trader’s worst nightmare if he hasn’t been waiting for confirmation as it’s a very early sign of a trend reversal. In other words, Bitcoin bulls are not yet ready to surrender to the bears.

Diversify, buy tether or HODL?

Tether Market Cap

Tether market capitalization. Source: Coin360

Bitcoin traders usually have the option to park their realized profits on Tether during the consolidation periods. This gives them the luxury of simply buying the case or re-entering by confirming a bullish reversal.

However, In a recent Forbes article on a formal investigation into Tether and his quick approach to a $ 10 billion market cap, after Brock Pierce recently announced his intention to run for the President of the United States, I would be nervous on my part, save a lot of USDT now.

Therefore, it is likely that a large portion of the $ 10 billion parked on Tether will logically head towards Bitcoin and top-class altcoins. This would explain the recent surge in altcoins and affect Bitcoin’s prospects in the near future.

Bullish scenario

If Bitcoin’s price can exceed $ 9,350, some key resistance areas need to be overcome before it reaches $ 11,500.

First, there is a large sales wall of around $ 9,500 in Binance, according to the tensor charts heat map. After this level, an attack on the multi-year resistance level of $ 10,500 appears to be back in the charts, and with all the tether fud, this is a scenario that looks promising.

Order book heatmap

Order Book Heat Map. Source: Tensorcharts

Bearish scenario

Using the same Tensorcharts heat map, there is a large pre-support purchase order from $ 8,900 to $ 8,990. If this level is not maintained, you would look for USD 8,350 as the next level to keep the descending channel of the day intact.

A break below $ 8,350 could open BTC’s $ 7,000 price as a short-term reality. However, since Tether may be out of the game soon, I doubt the bears will have a good week.

The opinions and opinions expressed here are exclusively those of @official and do not necessarily reflect Cointelegraph’s views. Every investment and trade movement involves risks. You have to do your own research when making a decision.