Panic selling on the cryptocurrency market this week. Bitcoin is losing 10.3% over the last seven days, trading around €6,300 ($7,000) on November 27. The price even approached €6,000 ($6,500) on November 25, with a very negative sentiment about the market, especially on social media. Altcoins are almost all dragged into this dowtrend spiral. Despite a bearish price action these last days, the level between $6,500 and $7,000 is located at a convergence of several technical signals that could lead to a bullish reversal. We reveal two scenarios that could confirm this reversal.
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- According to CoinGecko, market capitalisation is down sharply this week, to $171 billion from $220 billion last week.
- The dominance of Bitcoin remains stable at 66.1%.
- The FED is considering the creation of a cryptocurrency, with US MPs concerned about the loss of the dollar’s supremacy.
- Tezos (XTZ) and Cosmos (ATOM) are the altcoins that best resist the market dump, losing only 4.4% and 3.6% this week.
- The predominant feeling on social media is now fear with messages on Twitter announcing a Bitcoin at $3m000 or even $1,000.
We invite you to discover our complete analysis in video (in french and dated from November 26):
Buy according to your investor’s profile
- It is often when everyone is thinking about selling that the best buying opportunities are available. A psychology that must, however, be applied carefully. The level of €6,000 ($6,500) is interesting for trying buy entries. It is a historical support that held the Bitcoin price for the most of 2018. We reach this level, being very low on oscillators such as the RSI and the MACD.
- If the €6,000 ($6,500) support is broken, then it is likely that the price will quickly drop to the next major support at €5,000 ($5,500). A level that corresponds to the Fibonacci retracement 0.786 of the entire 2019 increase. This is the deepest level of retracement that can still justify a bullish reversal and then a longer-term bull market.
- On the weekly timeframe, the 200-week moving average is also close to the €5,000 ($5,500) price level. The Bitcoin price has never fallen below this 200-week moving average, which has already acted as a support during the December 2018 low of $3,200. It will be the last chance support for buyers. If the price clearly falls below this level, it will be a long-term sell signal on Bitcoin.
- A few positive elements: we are on the lower level of the Bollinger Bands in the weekly timeframe. The 50-week moving average is about to cross the 100-week moving average: a bullish signal.
- The first potential scenario that would announce the end of this correction: a slowdown of this bearish trend just above the €6,000 ($6,500) level, with low volatility and volumes. A similar scenario to the one that occured in December 2018 where many buyers were waiting for the $3,000 zone, which was never filled.
- Second scenario: a bearish capitulation with a final acceleration that pushes the price below $6,200 to reach prices such as $6,000, $5,800 or even $5,500. A price action leading to a phase of “panic selling”, followed by a violent buyback phase that raises the price as fast as it goes down and marks the end of the correction.
- Depending on your profile, buy entries are possible. If you are a long-term investor and are convinced by the value of Bitcoin, you can buy on the current level of €6,300 ($7,000) in case our first scenario happens. Short-term, it is the €6,700€ ($7,400) resistance that must be break to regain a bullish sentiment.
- If you would rather speculate, you can wait and place buy orders between €5,000 and €5,500 ($5,500 and $6,000) to hope to have good buy entries if the second scenario happens.
- Our sell signal was triggered on Ethereum, as the €145 ($160) bear break occurred.
- We now recommend to wait and not to buy back Ether until the situation has improved on Bitcoin. The level of €123 to €127 ($135 to $140) is also the 0.786 Fibonacci retracement level of the entire 2019 increase, but is not a good enough signal to buy. If this support breaks, the price of the Ethreum would drop much lower.
- If the price goes back to the old support that has become resistance, then breaks the €160 ($180) resistance with volumes, it will be a first signal for a bullish reversal on Ethereum. Even if a bullish reversal pattern can occured lower, which is not the case right now.
- Difficult week for Litecoin with -17.3%, down to €41 ($45).
- In the past few weeks, we recommended to wait and not to buy Litecoin, as the price did not show enough signs of a medium-term bullish recovery. This strategy is paying off today because Litecoin is also dropping with Bitcoin.
- The technical situation on Litecoin is even more bearish than on Bitcoin or Ethereum. Even the 0.786 Fibonacci retracement level that was around $50 has been broken, suggesting that there will be no significant bullish recovery on Litecoin in the short term. Almost all of the 2019 increase has been corrected.
- To find a first interest in buying Litecoin, the price has to go back above the €56/58 ($62/65) pivot.
Top & flops of the week (top 50 marketcap)
1- Augur (REP) : +4%
2- Cosmos (ATOM) : +1%
3- Tezos (XTZ) : +0,10%
1- Huobi Token (HT) : -24,90%
2- DASH : -21,90%
3- NEO : -20,40%
Hot crypto news
- The best investment strategy? Keep your assets without touching them.
90% of the time, it is better not to try to beat the market by engaging in trading.
The temptation may be great, but unless you are an expert or consult experts, the best strategy is to wait and see your capital increase as you go along.
- The volume in USDT on the Ethereum Blockchain exceeds 100 billion.
Tether gradually changes on use from OMNI to Ethereum.
This shows once again that Ethereum is establishing itself on the market as a common platform for most projects.
Only Bitcoin still escapes his influence.
- Ethereum reaches 3.7 million ERC721 tokens transferred in one day.
This is mainly due to the game Gods Unchained, whose recent activity is very important.
Ethereum has not experienced any problems or slowdowns.
Another proof of the good health of this technology.
- The FED is considering the creation of a cryptocurrency.
American MPs are openly concerned about the loss of the supremacy of the dollar.
This could also be a way to impose the dollar at the center of the cryptoasset market.
The announcement did not specify whether it was a stablecoin, but it is likely.
- Monero’s official website has been hacked.
The attackers took the opportunity to replace the download of the Monero client with a version that steals cryptos from its victims.
This indicates a relatively sophisticated attack.
- Bitcoin’s capitalisation is falling but the volumes of exchanges on Bakkt are growing at a rapid pace.
November 23rd shows a peak of 20.3 million dollars of contracts traded on the platform.
At Greyscale too, $171 million of inflows were recorded in Q3.
Qualified investors and institutional investors are increasingly showing interest.
The current prices seems to be an opportunity to be seized.
- MoneyGram, the money transfer company, receives an additional $20 million from Ripple.
Ripple had already invested $30M by buying back shares at a price well above the market.
The company uses Ripple’s On-Demand Liquidity solution.
Let us remember once again that XRP does not represent shares in Ripple, so the success of the Ripple system does not necessarily translate into an increase in the price of its token.
- The French Armies will use Tezos blockchain
It is the Tezos blockchain that the SIRPA (The French Armies and Gendarmerie’s Information & Public Relations Center), the communication service of the French armies, has chosen to use in the context of an immutable ledger.
This is the first deployment of operational smart-contracts by a public entity on the Tezos blockchain.
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Investing in cryptocurrencies involves a risk of total capital loss.
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