Wednesday, October 23, 2019

Where is the price of bitcoin heading?

Key facts:
According to some analysts, the price of bitcoin is preparing for a big move.
For Tone Vays, the most likely is a fall that puts the price around USD 7,000.

After having reached annual highs that are around USD 14,000 last June, throughout this month the price of bitcoin had dropped to some USD 8,000 for each unit, with some stability.

However, for some analysts there are indicators that the value of cryptocurrency in the market will have a significant variation very soon, even though this Wednesday the price fell to just under USD 7,500, losing more than 7% compared to the price With which the day began. This occurs even when there is a significant increase in institutional interest towards investment in bitcoin derivatives, such as futures in CME.

For example, an analysis note published on the Forbes portal on October 22 states that “a technical indicator of bitcoin, closely observed, showed that the bitcoin and cryptocurrency market could be prepared for a sudden price change, although not it is clear which path it will take ».

The Forbes article talks about a considerable decrease in the gap between the maximum and the minimum band for the Bitcoin Trading Envelope trend indicator, since the beginning of September. It was reviewed by Bloomberg at the beginning of the week. According to this analysis, bitcoin volatility could return to high levels in a short term, after keeping the price in a range between USD 7,500 and USD 8,500.

Additionally, the Bloomberg article notes that there is another indicator that suggests an abrupt drop in the price of bitcoin. By the time of its publication, bitcoin had closed below its opening price in 6 of the last 7 trading sessions (which happens on Wednesday as well). The last time this pattern was introduced, Bloomberg continues, the loss of bitcoin was close to 20% in one week.

Optimistic visions for the price of BTC

According to figures from Coin Metrics, daily bitcoin volatility reached the lowest levels since April. This is shown in the graph for daily returns in a period of 60 days available on the portal of the analysis firm, with a last update this Tuesday, October 22.

Based on this indicator, another short-term view for the price of bitcoin considers an upward directional bias. However, the fall on Wednesday broke the support of the USD 7,800 that analysts indicated for this bullish view of the price of bitcoin.

At the time of writing this note, the price of the cryptocurrency is USD 7,496, according to CoinMarketCap data. The loss of value in the last 24 hours, according to the same portal, has been higher than 7.7%.

Likewise, the current price of bitcoin is the lowest in the cryptocurrency as of May of this year. Since it went from USD 7,300 to exceed USD 7,900, between the 18th and 19th of that month, the price had not been below USD 7,500 until October 23.

Major losses in sight?

Wednesday's price movement seems to validate the position of the cryptocurrency ecosystem analyst, Tone Vays. Interviewed by Block TV News, Vays said Tuesday he was not convinced of an upward trend, despite the previous rise that brought the price to USD 8,500 in mid-October.

In contrast, Vays predicts a drop below USD 7,700. He even dared to foresee that the price of bitcoin would, in the short term, be just above the USD 7,000 zone.