Analyst: Bitcoin Facing a Wall of Resistance, Bears Could Return
The recent rally from mid-December’s bottom has been a positive sign for Bitcoin and its brethren but cryptocurrencies may not be out of the woods yet. According to a prominent technical analyst Bitcoin is facing a ‘titanium level of resistance’ that could spell further losses if not broken soon.
‘Titanium level thickness cluster of resistance’
That does not read well for Bitcoin traders and investors, many of which were hoping that the ice and snow from the crypto winter could slowly be starting to melt. Bitcoin has recovered 25% since its 2018 low of just below $3,200 on December 15. Currently trading at $4,000 it has been up-trending since last year’s darkest day for crypto markets.
According to prominent market analyst Murad Mahmudov BTC is facing a wall of resistance at this level and is more likely to fall again the longer it stays here, failing to break through;
Using a range of technical indicators including SMAs, EMAs, Bollinger Bands, Ichimoku Clouds, and Gaussian trendlines he has constructed a chart displaying a snapshot of the current market conditions. They do not look particularly promising for Bitcoin which has a lot of resistance to overcome at this price level.
He adds that the network value to transactions ratio which measures the dollar value of Bitcoin transaction activity relative to network value is also looking bearish;
“NVT going higher does not inspire confidence right now. Chain usage has gone down, while the price has gone up. The graph below hasn’t updated for yesterday’s jump in price yet either. We are getting increasingly overvalued overall, the bear market could be prolonged even more,” before adding “For what it’s worth, the Bitcoin Network Momentum has not yet reached the level that it has during the Jan2015 bottom.”
Ethereum Facing Similar Circumstances
Murad paints a similar picture for Ethereum which has shown bearish signals over several timeframes;
“Bearish Wedge broken down on almost all timeframes … Bearish regular RSI divergence has been seen on several timeframes for several days now… Bearish OBV divergence on several timeframes,”
Ethereum has almost doubled in price since its bottom on December 15 and while the upcoming Constantinople hard fork could be driving its recovery, further losses could be inevitable.
This particular analyst, who has got it right on a number of previous occasions, still thinks a lower low is about to come and the crypto winter is far from over;
“All in all, not only do I believe that the bottom is not in yet, I increasingly believe that this bear market can last longer than most expect. This is definitely one of the ways that the market could “surprise” us.”
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