Will there be another bitcoin price decrease?
The price of bitcoin after the recent fall has stopped in the area of the utmost volume, which has been forming from mid-June to mid-July. If the fall seen on September 5 to 11 was partly caused by buyers who invested in bitcoin at the start of June at $7,200- $7,500, the current stoppage means that buyers in the $ 6,200 area have held their ground.
Investor and billionaire Michael Novogratz believes that the low point of the market has now been passed.
On Twitter, he wrote that the price has returned to the same period as that of rapid growth in 2017. In early June, Novogratz predicted a rise in the price of cryptocurrency starting from mid-2018. He said that by the end of the year the price could rise to $40,000.
Most traders place protective orders in accordance with the classic method - behind the nearest extremum. It is not known in advance whether a breakout of the minimum turns out to be true or false, but everyone is trying to save money. Therefore, stop orders for the sale of bitcoin are located in the $5,700 - $6,000 area. The horizontal chart displays the amount purchased and sold at a specific price. The volume of purchases in the $6,200 area is at least twice the size of the volume at $7,200. Therefore, if the price reaches stop-orders for sale, then, probably, the bitcoin rate will drop to $4,500.
To see a 30% drop, there needs to be a big buyer and a piece of negative news. Many are eagerly anticipating an outcome of a decision on September 30 over SEC’s (U.S. Securities and Exchange Commission) approval of Bitcoin-ETF funds from VanEck and SolidX Bitcoin Trust ETF. These funds are designed for institutional investors. Until September 30, the market can be manipulated through the negative news regarding this topic. If at the same time the price of bitcoin comes close to protective orders, then this is almost certainly a manipulation. In this scenario, after falling to $4,500, the rate will rise again. Meanwhile, SEC suspended trading on exchanges that use shares for the cryptocurrency.
In recent days, the demand for bitcoin has increased. It’s displayed through the green columns, the data for which is collected from the order book. Located in the $6,250 area, there is a volume of short-term buyers. At this mark, further movement will be decided. If there is a turn at this level, then defensive orders will spring into action below $6,250 and the price of bitcoin price will surpass the minimum mark of September 11. Then the fall may continue further since the protective orders of long-term buyers will start to be triggered. If the U-turn does not happen, the rate will rebound to the nearest resistance of $6,800.
The price of Ethereum (BITFINEX: ETH/USD.BITFINEX) ended its fall on September 12. Prior to this, the number of downgrade deals at Bitfinex exchange exceeded the maximum of 2018:
The rate stopped in the area of high volume for purchases which formed during a fall on September 7.
Buyers who invested on September 7 and failed to close positions during the fall, sold ether on September 14. The largest volume of the upward trend in purchases was formed at $205 level. This mark will be decisive when correcting downwards. The downward long-term trend is seen by all traders. Therefore, those who bought in the $205 area, probably defended their positions with stop orders just below that level, so as not to fall into a drawdown. If the price of ethereum reaches $205 and forms a downward turn, then there is a high probability of updating the minimum.
The price of XRP (BITFINEX: XRP/USD) has come close to resistance, from this point, the rate can once again update the minimum.
The rate did not reach the highest volume of purchases, which was reached on September 6-7. Also higher than the peak of the current growth lie the large sale orders. Perhaps these are the buyers who are trying to come out with minimal losses. On Saturday, the peak of XPR sales has already formed, exceeding that of last week.
Worth expecting a similar scenario for Bitcoin cash (EXANTE: BCH.EXANTE) :
Due to a drawdown of 18%, buyers in the $500 area are likely to start closing their positions when the rate reaches the levels where they bought in. Part of the buyers left the market on September 8. It can be seen from a bearish candle with a long body that starts at a minimum of $491. Therefore, the price of BCH at the time of sales will decrease to at least the nearest support at the $460 area. What happens further, depends on the nature of sales at the $500 mark. If the fall is rapid, then those who bought in at $460 may also leave the market. According to this option, the rate will then update the minimum.
The USD/EOS, USD/STR, USD/LTC, USD/XMR pairs had received support from buyers near the lows that formed on September 12. If prices once again fall to these levels and manage to form a reversal wave, then those who entered at the lows will place protective orders at the base of that wave. In this case, if a breakthrough will be repeated, a deeper fall will occur.
Trading in the cryptocurrency market is associated with high risks and is not suitable for every investor. The above analysis should not be considered as a recommendation or a call to action. Each trader should assess the risks for themselves. Both the author and Insider.pro are not liable for the potential losses incurred.