Bitcoin Faces Biggest Monthly Price Drop of 2019 Despite Late Upturn
- Bitcoin looks set to end November on a negative note. A monthly close below $8,300 could yield a deeper drop in December, according to a popular analyst.
- The hourly chart continues to call a move higher to $7,800–$8,200. A bull reversal would be confirmed on the three-day chart if prices close (UTC) above $7,380 today.
- Acceptance below $6,515 would invalidate the bullish hammer candle seen on the three-day chart and invite stronger selling pressure.
Bitcoin is poised for the largest monthly loss in 2019, despite recent recovery from six month lows.
The number one cryptocurrency, Bitcoin, is currently priced at $7530 on Bitstamp. This represents a 17.6 percent decrease from its Nov. 1 opening price, $9,586.
If prices had remained at their Nov. 25 low of $6,515 for six months, the percentage drop would have been more than 30 percent.
In November 2018, Bitcoin suffered its largest monthly loss since December 2017. Prices plummeted 37 percent in November 2018, reviving the selloff that began after December 2017’s record-breaking $20,000 high. In December 2018, the cryptocurrency fell to $3,122.
Histories fail to follow the pattern
Bitcoin was expected put on a great show in November, with the miners’ rewards halving due May 2020. The history of cryptocurrency shows that it has been able to pick up a bid six-months before the supply-cutting event.
The price of bitcoin has dropped this time around, possibly because miners have sold off their bitcoin , as Willy Woo noted.
The third quarter saw Bitcoin drop from $13,000 to $7500, and this price slide had a significant impact on miners’ profitability. In November, weak hands sold bitcoins to recover their costs, thereby boosting bearish pressures on the cryptocurrency.
According to Woo, BTC could experience a larger drop in December if the current month’s prices fall below $8,300.
A monthly close above $8,300 seems unlikely at the moment. However, prices could rise as high as $8,000 before Saturday’s UTC closing, as bullish signals are being flashed by technical charts.
Bitcoin has bounced up from the former resistance-turned-support of the inverse head-and-shoulders neckline at $7,360, reinforcing the bullish breakout.
Moving averages (MAs), which indicate the direction of least resistance, are showing the higher side. The MAs at 50 and 200 hours have shown a bullish crossover, and the 100-day MA appears set to surpass the MA at 200 hours soon.
The relative strength index reports bullish conditions at 50 and above.
Bitcoin could reach resistance levels of $7,800. There would be $8,200 penalty for a violation (inverse head and shoulders target).
The hourly chart indicating bullish conditions suggests that BTC’s current 3-day candle will end Friday, UTC, at $7,380.
This would confirm the bullish-to-bearish trend change indicated by the hammer candles created in the three-days to Nov. 26 and possibly lead to an increase to $8,200.
Although it seems unlikely, sellers will make a strong return if prices fall below $6,515, the low price for hammer candles.