Bitcoin (BTC) bled yet again this week, as the bears assert their dominance in an increasingly volatile market, with BTC losing as much as $400 USD yesterday and tumbling towards the $8,000 milestone.
The bearish movement of Bitcoin has been ongoing for months, with the exception of a few relatively small reprieves, and has many speculators wondering if the bottom is in sight. Well, one very prominent trader has interpreted a technical analysis by legendary chartist and former editor of the Magazine of Wall Street Richard Wycoff, which suggests that the bottom was actually at $7,300 USD.
Twitter trader Coiner-Yadox has pointed to the price movement of Bitcoin from its long-term bottom of $3,150 reached in December 2018 as a classic example of a Wycoff pattern. Wycoff’s studies suggest that a strong surge upward following a bear market precedes a double-top pattern, an accumulation throwback, and then an extended bullish breakout. Yadox has suggested that if this Wycoff analysis is applied to Bitcoin, then it hit a medium-term bottom at $7,400, which happened just a few weeks ago, and that a breakout is just around the corner.
While Yadox is taking a technical approach to guessing the future movement of Bitcoin, it remains simply an educated guess. The Wycoff analysis does not incorporate the external market factors, of which there are many and the fact that the Bitcoin halving is just months away. The halving is due to take place next May, and for the first time, Bitcoin looks to be heading into the event in a bearish trend, signaling more volatility ahead for investors.
Bitcoin has drawn some optimism in recent weeks from the softening stance of the Chinese government. While it appears that President Xi Jinping has changed his tune in relation to blockchain technology and opted to embrace it, it does look as though China is still opposed to Bitcoin and other digital assets that do not originate from China and will instead focus on developing its own digital coins.
Featured Image: DepositPhotos © freedomtumz