Bitcoin could be headed for a Bullish Market in Early 2019October 16, 2018
Bitcoin, representing the largest cryptocurrency in the world by market cap and any other indicator has been in a state of decline. It rose over 150,000 percent since it first became listed on digital currency exchanges back in 2010. But since then, the cryptocurrency went through several bear runs and bull runs, while also gaining more media attention each year.
Today, the cryptocurrency is still the most relevant in the world and continues to be a benchmark for almost any event in this field. BTC, its native token, is used for a range of purposes, for large-scale B2B loans to online bitcoin betting services. Naturally, its price is always under the overview of numerous analyses, both machine-derived and human.
Now, there are some indicators showing that the current bear market might be winding down and that the price would experience a new sustained rise. This should occur in 2019 and here are the reasons why some predict that this will take place.
The BTC Market and Traditional Chart Patterns
It can be said that from a technical perspective of a market analysis, there are some container-intuitive elements to the BTC price movement when compared to a traditional market. The descending triangle of a bearish market is a great example of this notion. The setup contains the potential of breaking either up or down, but the repeated descending triangle is seen over the course of the BTC life cycle, which leaves many open questions. Is the pattern perceived in the wrong manner?
Could the current year’s trajectory be somehow different than other ones? This leaves the potential for a BTC bullish breakout. The key factor in this is the 200-day moving average or DMA which bitcoin exhibits and its connection to the dropping triangle pattern that has proven to be significant. The same triangles are measured by making the connection of the series of lower highs, which are sharp in comparison to the primary trend line.
The second baseline is made by connecting two or more of the deepest price dips to create the horizontal line or the floor. This triangle, in theory, forms a shape which shows a gradual loss of buyer and seller confidence in the same asset.
A Hope for a Change
The current state of the bitcoin market is not at its strongest and there is no particular need to underline this. However, when the previously mentioned indicators and patterns are combined with the bitcoin’s weekly chart they provide a consistent counter-resist to the traditional bearish standards. The price in general breaks towards the bullish end of this formation instead of going towards the lower support levels as it usually does in other markets.
The last time bitcoin broke from this form of descending triangle occurred in March of 2014. After the breakdown, the bulls succeeded in creating a short-lived rally that was rejected by the then 200-DMA. The same trend then held the price low for almost one-and-a-half year.
However, the same period ended eventually and resulted in the gradual climb which culminated in a price of bitcoin of 20,000 USD. Now, the history would suggest that the possibility of the upside break of the current triangle could be in the cards and this would indicate of a DMA as a trend of larger reversal.
Yet, while there is some correlation between the 200-DMA and the BTC trends, it is important to remember that the patterns might vary in size and scope, but according to the last long bear run, the possibility of BTC changing in early 2019 is becoming more and more possible. Now, there is a chance that the price will break down as the chart show it should according to the triangle pattern, the old resistance and support should be found around $5,000.
However, bitcoin has ignored the bearish setup of the descending triangle even before this year, so the idea of having a bullish breakout has merit. Earlier, the bear market lasted for a long time only to give way to a big and long breakout of the bulls. If the BTC price finds acceptance beyond the 200 DMA, the descending triangle could be turned to a bullish market setting.
The 2019 Breakout
The idea of the BTC breaking out in early 2019 has complex implications that are related not just to the processes of market movement, but also the ability of the world to create the atmosphere for the same event. The main issue is that the breakout could not be conducted on the level of 2017, simply because of the fact that the novelty factor has passed and that the investors would be hesitant about the potential of a new slide into the bear domain.
While the idea that a new generation of investors would be willing to jump into the market two years on after the big bull run is relevant, the number of these investors is questionable. The ventures of the modern economy, like esports, for example, demand dynamic activity and ability to change portfolio quickly but still include a healthy measure of hesitancy. The general principles of market psychology show that a bull breakout in early 2019 could not provide the vigor needed to take the price to the 15k range.
The Missing Important Markets
Finally, one additional factor dampens the potential of a big breakout – the absence of big markets that fueled the breakouts of 2015 and 2016. These are mainly China and South Korea, both of which have come under large-scale regulatory clampdowns.
The China of 2019 is not the same country as that of 2014 and the same will reflect on its interest and ability to purchase bitcoin in the case of a breakout. South Korea might be a bit less drastic example, but its regulators have nonetheless been hard at work in this regard.
With both markets being out or only slightly present in any potential breakout, the hopes for bitcoin price going north would likely set even the most ambitious predictions at $10k and not much over it. Of course, the same applies only if the bull market manages to overcome the currently strong bears in the crypto space.