The price of Bitcoin (BTC) drops more than 10%, but after 100% performance in 2 months!
BTC stock market crash or powerful and logical profit taking? Let’s take stock of the situation.
Rejection under the historical record for Thanksgiving
What had to happen happened! After having reached its historical record of December 2017 during the session of Wednesday, November 25, the price of 1k Daily Profit entered a phase of near-crash, after 7 consecutive weeks of linear rise. Euphoria had swung to the major altcoins in the most recent sessions, especially but not only on Ripple’s XRP corner.
The decline seems violent, but the market has taken almost 100% in the space of two months! Still, let’s not bury our heads in the sand, it’s been a long time since the BTC has posted -10%, so what are the reasons?
First of all, the Thanksgiving/Black Friday period has resulted in a sharp decline in institutional liquidity in the market, and we know that the BTC has been carried by smart money traders in recent months. It is also a profit-taking phase, almost logical (not to say expected), which brings us back to the rational after the euphoria.
Finally, it’s an expiration weekend on the Bitcoin future contract. We can expect a few sessions of high volatility before the trend can resume.
When to return to purchasing on Bitcoin (BTC)?
First of all, you have to be right. It seems that rumors of stronger regulation on cryptomoney are circulating in the United States, but in the end, regulation is a favorable structural factor for a class of financial assets.
The market has just entered a profit-taking sequence and the daily technical indicators are coming out of their over-exposed buying zone at the bottom, after having built up a small bearish divergence (see the daily RSI below, a short divergence, the most powerful according to Welles Wilder, the creator of the RSI technical indicator).
The correction phase could last this week, until the end of Thanksgiving/Black Friday. On the long term charts (see above the weekly chart), the first horizontal chartist support is at $14,000, the old record for the year 2019.
I believe that this support is the guarantor of the fundamental upward movement and should limit the amplitude of the correction. The watchword now is patience; we must give the market time to breathe, to stabilize and to build a technical bullish recovery figure. The correction seems to me to be able to go to the bottom on the $16,300 support, it is far too early to say if this will be the low point. I’ll tell you more about it in the video next Tuesday!