Analyses

Bitcoin - Technical Analysis - Mon, Dec 23, 2019

On Tuesday, December 17, Fidelity Investments, one of the world’s leading multinational financial services corporations, announced that it is establishing a new entity to offer financial products and services to European institutions interested in investing in digital assets, such as Bitcoin:

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Source: Twitter

The cryptocurrency community welcomed the news, because an influx of institutional money into crypto may trigger another Bitcoin price pump.

On the next day, French financial regulator Autorité des Marchés Financiers approved the country's first Initial Coin Offering (ICO). Although a new big ICO hype is not likely in the foreseeable future, we see the approval from the financial regulator as psychological support for the crypto market.

On Thursday, during an interview on BLOCKTV, venture capitalist Tim Draper once again confirmed his previous forecast for the BTC price hitting $250,000 by the end of 2022 or early 2023:

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Source: Twitter

In addition, Draper outlined that the level of $250,000 per Bitcoin might be a fact even earlier: in six months to a year after the Bitcoin halving.

The cryptocurrencies have reacted to the news positively and their prices have returned to the green zone. For instance, the price of Bitcoin has rebounded from Wednesday's local low at $6,477.00 up to $7,520.60 per one digital coin:

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Daily crypto market performance. Source: Coin360.com

Bitcoin Technical Analysis

On the daily chart (D1), the price of Bitcoin continues to move within the «descending channel»:

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Although on D1 the bearish signal remains, it is worth mentioning that the bearish sentiment is decreasing because of the recent price rebound. If the rebound continues, the bulls may push the price further up to the upper line of the «descending channel», or the 50.0 Fibonacci retracement level ($8,336.50).

On the weekly chart (W), a «Hammer» candlestick with a long lower shadow formed last week:

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The «Hammer» candlestick formation is a bullish reversal candlestick pattern, showing that the sellers may be running out of steam.

Therefore, on the 3-hour chart (3H), it may turn out that the Bitcoin's recent sharp decline to the level of $6,477.00 was a fake breakout and the potential «ascending channel» may resume:

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If the uptrend on 3H resumes, then the price of Bitcoin may reach the 50.0 Fibonacci retracement level or $8,366.50 within the next few days; otherwise the price may drop to the lower line of the potential «ascending channel» that is also an equivalent to the 38.2 Fibonacci retracement level or $7,182.10.

In conclusion, the bearish sentiment on the weekly and the daily charts is declining and the 3-hour time frame suggests a beginning of bullish sentiment.

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The analysis is purely informational and does not constitute investment, financial, trading, or any other sort of advice and you should not treat any of Bitvalex's content as such. Bitvalex does not recommend that any cryptocurrency should be bought, sold, or held by you. You are solely responsible to conduct your own due diligence and consult an advisor before making any investment decisions.


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