The Bitcoin price underwent a rapid increase on October 25. Measuring the rate of increase and time it took to transpire, it was the largest such increase since 2011 — when the volume in the markets was minimal.
Crypto Twitter has been on a bullish frenzy, with many calling for new highs — even an all-time high — to be reached.
If you think the bitcoin move from 7,300 to 10,300 was bearish (largest move since 2011)… Please tell me – what would make you bullish? What possible criteria would make you flip your (emotional) bias?
— The Wolf Of All Streets (@scottmelker) October 29, 2019
One trader, however, has not been convinced that the bulls have taken over. By using readings from the long-term time frame, @TraderX0X0 on Twitter raises several valid reasons why the Bitcoin outlook might still be bearish.
$BTC – Hindsight one for you…. why so bullish boss?
Many reasons not to long into resistance..
daily level from which price dropped $2000
You might want to check your direction bias folks! pic.twitter.com/WsUvafzE44
— TraderX0 (@TraderX0X0) October 29, 2019
The reasons have to do with the monthly level, presence of wicks, and the amount the price has decreased since the high. Let’s look at each of them closely and see if they provide an answer for the direction of the ensuing move.
Monthly Bitcoin Price Level
The monthly chart is characterized by five long upper wicks.
Also, the current monthly candle comes after three bearish candles in a row. Judging by its height, it does not seem significant enough to indicate a reversal.
However, the price has found support and bounced at the very significant $8000 support level. Therefore, while the amount of the increase is not significant enough to confirm the reversal, it is transpiring at an important support level.
The daily level has created a very long upper wick once it reached $10,400 inside a minor resistance area.
Measuring from the high of the wick, the current Bitcoin price is roughly 10 percent lower than this.
The amount and swiftness of the decrease is a sign that the previous upward move could not be sustained.
Previous BTC Price Rally
In the short-term, we can see that an increase of 40 percent occurred within 16 hours.
The increase was rapid while lacking a trading structure.
If we attempt to draw a support line since the beginning of the move, we can see that it was eventually broken on October 28.
The recent Bitcoin upward move could have very well been the beginning of a new upward trend. However, due to the bearish outlook of short-term time-frames, a retracement could occur before BTC resumes its upward movement.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
Images courtesy of Twitter, TradingView.
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