Bitcoin’s Third Bear Market Showing Little Sign of Letting Up: Analyst
Despite several attempts to rationalize bitcoin’s yearlong downturn, the leading digital currency remains locked in a protracted bear market that is showing little signs of letting up, according to veteran analyst Willy Woo. Based on this view, there’s little evidence to suggest that a reversal is imminent.
Bear Market Continues
In a recent tweet, Woo emphasized that bitcoin’s downtrend is likely to continue for longer and that there was no evidence of a reversal anytime soon. This view is reinforced by a historical analysis of bitcoin’s trajectory, which suggests that sideways trading is the best the market can hope for at the moment.
“Bitcoin has seen only 3 bear markets in its history,” Woo said. “We are in the third one now. One signal we can use to determine the end of the bear is for the price to cross above its 200 day moving average.”
Woo’s position isn’t bearish on the value prospects of bitcoin; it merely suggests that the bulls aren’t out of the woods yet.
The view that bitcoin is still in the middle of a downtrend contradicts several leading opinions on the matter. Wall Street crypto analyst Tom Lee has predicted that a return to record highs is possible this year, while billionaire investor Mike Novogratz has said that an exhaustion of the current downtrend will likely generate a bullish reversal in the foreseeable future. Although some of these viewpoints are backed by fundamental research, fear, uncertainty and perhaps manipulation have undermined bitcoin’s revival. This comes despite a wave of positive developments regarding institutional adoption, business innovation and even regulation.
As Hacked recently showed, bitcoin’s latest price collapse appears to have been set in motion by a prominent whale moving hundreds of millions of BTC and BCH to multiple wallets. A large chunk of those assets were then transferred to leading digital currency exchanges where they may have been sold.
Bitcoin is currently trading at $6,331 on Bitfinex, where it is little changed compared with the previous session. Data from CoinMarketCap suggests the BTC price has gained roughly 1% over the past 24 hours on trading volumes of $4.4 billion.
Bitcoin’s momentum indicators suggest lateral moves are likely to continue in the short-term as neither the RSI nor the MACD is showing signs of breaking out. The leading digital currency slumped at the start of the week after failing to make new highs. The BTC price appears to have formed a double-top above $6,500, which eventually paved the way for a reversal.
At current values, bitcoin is capitalized at $109.6 billion, which represents 55.3% of the entire market.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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