Bitcoin at $6,000: Time to Go Down?
100% Gains in 2019
Are We About to Go Down Swingin’?
Bitcoin at $6,000
Something happened yesterday that hasn’t happened since last year. Bitcoin traded above $6,000 on Coinbase. At the time of this writing, it’s still hovering right around the $6,000 mark, give or take $10 dollars.
This isn’t some arbitrary occurrence. During the price collapse in 2018, Bitcoin routinely dropped to $6,000 only to bounce back. Eventually, that support line fell in November, and the price dropped to the low $3,000s. Now, we’re back knocking on the door of $6,000. Here’s the question on most Bitcoin traders’ minds. Can the price break through this important line, or is it going to drop after failing to break out?
Here are my thoughts. I think we’re going to drop soon. Probably to the tune of about $1,000. Even with that drop, I think things are incredibly bullish. Here’s why:
On April 27th we saw a bullish cross on the 50- and 200-day exponential moving averages (EMA). Cool right? That’s what I said, too. In non-math-nerd-speak, this is an extremely positive sign. In other markets, this is a typical “buy” indicator. In Bitcoin, the last time this happened, this was a “bet the farm, sell the house, and rob a convenience store” buy indicator.
Here’s a chart that’s on a linear graph. The other two charts were plotted logarithmically. As you can see, this linear chart got REALLY tall. A logarithmic chart levels the highs and lows, while a linear chart doesn’t. The last time we had a bull cross on the 50- and 200-day EMAs Bitcoin went a run from $284 to $19,797 in just two years. That same indicator pattern just happened.
Here’s what I’m not saying. I’m NOT saying that Bitcoin is going to go on a 7,000% bull run and hit $4,200,000 in 2021. That would be outrageous! It would be just as outrageous as that other time when Bitcoin went from $284 to $19,797 in two years!
Joking aside, I think Bitcoin has hit bottom, and has transitioned out of a bear market. I’m not ready to call this a bull market yet – it’s more of a sideways market. I want to see what happens at $6,000. In my mind, how far Bitcoin drops is going to be indicative of how bullish this market really is.
There’s a lot going on in this picture, but if you’ve made it this far, you’re invested in this post. You must want answers!
The bright purple lines are the ascending channel in which Bitcoin is currently in. If Bitcoin hits the bottom line and raises again, that’s incredibly bullish.
The orange line is Bitcoin’s 50 day moving average. If it hits that line and keeps going, that’s super bullish.
The purple line is Bitcoin’s 200 day moving average. If it hits that line and goes up, that’s really bullish.
The color graph is a Fibonacci regression chart (don’t worry about that – it’s math stuff). If it hits the .382 line at $4,250 (when green meets yellow) then that’s regular bullish. If Bitcoin goes under that line, then all bets are off.
So that’s what I have for you. Keep an eye out, and we’ll see where Bitcoin ends up in the next ten days ago.