There was only one dominant color for cryptocurrencies yesterday: red. The crypto king, Bitcoin, dropped below the $6,000 mark, back above that vital level today with a gain of 4.64%, last price, $6,310. However, there are some serious concerns that we may actually make another new low for the year because of the sturdy bearish sentiment. Bitcoin is down nearly 55% year-to-date and it is down 66% from its all-time high.
Traders have been waiting for the bull rally since early June, although there have been two different occasions where we have seen the price action showing some serious strength. But in reality, bears have shown their brutal strength over the bulls.
The first bullish signal for the Bitcoin price came fairly recently on the back of speculations that the SEC (U.S. Securities and Exchange Commission) may approve the first Bitcoin ETF (Exchange Traded Fund). The price moved all the way to $8,230 but it failed to break above $10,000, a major key level for the bulls. The second strong signal came back in early May this year when the price confirmed the bull strength and made a high of $9,734. However, it failed to break above the key resistance of $10,000.
The only reason that we are seeing cryptocurrencies selling off so badly is that traders are losing hope of a bull run. Yes, we are back above the key level of $6,000, but as long as the price keeps on having a stab at the lows of this year ($5,791), we are still not out of woods.
Looking at the previous year chart, bull runs start from September or October. We still have time for that. However, the price had been expected to form its bottom in Q2 of this year and from there onward, it would only be green light for Bitcoin. However, we are in the third quarter of this year and it appears that the price could form some sort of bottom during this quarter . Hopefully, the current sell-off would mark the bottom for the Bitcoin price.
So just how far the current move can extend to? From a technical perspective, there are some important key levels which I am watching carefully. If the downtrend continues, the following are the key levels:
November 13th low: $5,605
October 18th low: $5,109
Psychological level: $5,000
As of today, Bitcoin has broken yesterday’s high of $6,298. This means there is a possibility that we may just have a false alarm and the price may not form another new low for 2018. If that happens, then there is strong hope for the bull run to continue this year.