Bitcoin has just broken the 50 week moving average for the first time since 2014. History is repeating, in accelerated fashion.
If BTC fails to quickly re-attain the 50 week level around $7700, then the promise of the recent death cross's $3500-$4000 target is likely be kept, although I see the super-long-term upward channel as providing support just above.
Today we are issuing the following revised targets, which are contingent on BTC not making it up past $7700 in the next 2-3 days:
September 2018: $5000 (low of the retrace)
January 2020: $29,000
Let's take a look:
This chart shows 9 years: 2012 - 2020 inclusive. The blue line is the 50 week moving average. Comparing the 2014 top and the present day movements, once again we have a slice through the all-important 50 week MA (blue).
Just as in 2014 RSI (below the main chart) is sub-50, and this time has clearly rejected the 50 line which is bearish.
The dotted green lines from each peak show the relative higher aggression of this retrace, and allow us to project when we might re-enter the long-term uptrend channel (shown), and the price range of that channel where it does so, giving us a $4800-$6300 window.
January 2020 targets are over on the right.
Is this a done deal?
Well not quite - it's still possible this is an overshoot and BTC could find support from the 50 week moving average, but the momentum picture (RSI) isn't supportive of this currently. Further, this would be a significant digression from the 2014 picture, something we've not seen yet other than the more aggressive pullback last week, which merely shortened the projected timescale compared to 2014.
On the daily chart the break of the 50 week (yellow here) is very clear compared to the support it found back in March/April.
Bitcoin is at a support band however (blue dotted horizontal lines) and slightly oversold, so a bounce here is possible. Buyers aren't stepping in with any gusto yet though - so whether my bearish prognosis above comes true is all about what happens over the next 2-3 days - a move up above $7700 would be cause for short-term hope for bulls.
Ethereum is bouncing off its 50 week, and slightly oversold. Volumes remain bearish however. How this concludes is all about BTC I'm afraid, as ever.
Similarly, Ripple is bouncing at its 50 week (yellow). Note that Ripple hasn't existed long enough for that indicator to extend further left! If BTC doesn't re-attain its 50 week and everything else follows suit down, watch out for the big gap below $0.45 which is the last support for a while - below that it's likely to reverse very quickly to the marked green $0.299 level.
Litecoin, ever a favourite, is the strongest chart here. Although it's just under its 50 week, it's at very strong support (green). A drop under that would put the next support into play around $93.
BCB Group has no position or opinion on the price of Bitcoin or any other cryptocurrency and this article should not be construed as analysis of or advice regarding the current or future market price of Bitcoin or any other cryptocurrency. No analysis of the price movements of BTC or any other cryptocurrency or any other asset provided by BCB Group should be construed as an invitation or inducement to buy, sell or otherwise to trade BTC or any other cryptocurrency.
Strategy and Execution Partner
Jon is MD of British music production company Poseidon. He began studying technical analysis in 2000 for use in managing his own investments and due to its overlap with behavioural economics – much used in Poseidon's international marketing work. This has seen the company achieve three iTunes US number one albums in as many years among other notable successes.
A Bitcoin investor since 2013, Jon and has been providing Technical Analysis (TA) commentary for a private community of Cryptocurrency investors since mid 2017.