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Bitcoin Price Stabilizes Following Brush With 2018 Low as Search for Bottom Continues

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Bitcoin is back to trading above $6,100 after the cryptocurrency set a new bear-market low for 2018, triggering a partial relief rally Sunday afternoon. However, the search for an elusive bottom will likely continue as the breakdown of technical positions keep retail investors on the sidelines.

BTC/USD Price Levels

Bitcoin broke below $5,800 on Sunday, marking the lowest point of the year for the largest cryptocurrency by market cap. Depending on who you ask, BTC/USD values bottomed around $5,787 on major exchanges, surpassing the Feb. 6 swing low by around $60. The new low marked a nearly 71% reversal from the December high of almost $20,000.

The new low triggered an oversold signal on the Relative Strength Index (RSI), which later helped BTC values recover above $6,100. At the time of writing, BTC/USD was valued at $6,153.45.

Bitcoin has held above $6,100 for more than ten hours, with daily trade volumes hovering around $4.9 billion.

The broader cryptocurrency market has been dragged along for the ride, with total assets in circulation reaching a low of around $235 billion. Altcoins have shouldered heavier losses and now account for just 58% of the total market. Bitcoin represents the other 42%.

Interest in Bitcoin Grows for the First Time Since March

Google searches for the word “bitcoin” increased this month for the first time since early March, ending 12 consecutive weeks of stagnant or declining interest for the biggest cryptocurrency by market cap.

Google gave “bitcoin” a trending score of 12 in the week ended June 16, up four points from the previous week and the highest reading since Apr. 28. Bitcoin’s trend value declined by three points to 9 in the week ended June 23.

Trend scores gauge interest in a particular keyword using a scale of 1-100 where higher readings are associated with greater search activity. Bitcoin received a perfect score of 100 before Christmas, which was around the time that prices peaked above $19,500.

Google search activity is seen as a barometer of first-time buyer interest in the cryptocurrency market. As the chart above demonstrates, organic searches for “bitcoin” were highest during the height of the bull market as more people became interested in cryptocurrency.

Chris Burniske, formerly of ARK Invest, made the connection between Google search trends and bitcoin prices as far back as last summer when the market for cryptocurrencies was just heating up. The relationship between internet search activity and bitcoin prices was jokingly referred to as “a virtuous Satoshi cycle.”

Bitcoin’s bearish reversal has given rise to the complete opposite of the virtuous cycle highlighted by Burniske. As a matter of fact, declining interest among first-timers is believed to be a major contributing factor of the half-year correction in the market.

According to Nick Colas, a prominent crypto analyst for Wall Street, it may take several years before bitcoin returns to record territory. In his view, the key driver (which bitcoin lacks) is new adopters.

“Like any new technology, you need new adopters to come in to make it more valuable.” Colas said told CNBC in a March interview. “Then, we have a solid trek higher. Then, interest will reengage.”

Exchanges like Coinbase have expanded service offerings that cater to institutional traders partly in anticipation of further depreciation in retail interest. Last month, Coinbase launched a suite of products geared toward unlocking up to $10 billion in institutional capital the firm says is currently sitting on the sidelines.

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.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 502 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Peter Schiff Tells Joe Rogan Bitcoin Price Will Hit $1,000

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“They think ‘oh, there’s twenty-one million Bitcoins’, and they think that that means they’re scarce. Well they’re not scarce, there’s so many other currencies out there, and it’s only scarce because… it’s coded to be scarce. Gold is scarce because it really is scarce.”

So said investment broker and financial commentator Peter Schiff on July 17th’s episode #1145 of the Joe Rogan Experience. Schiff fully believes that Bitcoin will drop below $1,000 in the near future, at which point it will disintegrate entirely. Funnily enough, Bitcoin’s recent surge began the same day that Schiff conducted the interview.

“There’s nothing that any other cryptocurrency can’t do that Bitcoin is doing… it doesn’t have any actual value. There’s lots of things I can do with gold that shows it has value…”

Lack of Real Value

Schiff went on to list the myriad of industrial, mechanical, medical and personal uses for gold which give it a real-world value – a value which he says Bitcoin lacks.

“All you can do with it is give it to somebody else. That’s its whole purpose is to give it to somebody else.”

At one point in the interview Rogan reminds Peter of the comments he made earlier regarding the state of the dollar economy, and questions why a crypto-based economy couldn’t be feasible.

Schiff, ever the proponent of small-government, pointed out that it would certainly be possible for the government to issue a digital currency in much the same way that they currently issue paper fiat currency, and that such a move would eventually tighten the government’s grip on the whole economy. Whereas before you could receive a $50 from your neighbour for some yard work and not have anyone know, now all of a sudden it would be tracked.

Fatalistic Predictions

It may seem like Schiff dodged the question by pushing everything towards the government angle, but his answer actually revealed his deeper thoughts on the issue. It’s clear from listening to Schiff speak that he doesn’t even question whether governmental regulators will get their paws on crypto – he naturally assumes it to be the case. He goes back to emphasize crypto’s lack of inherent value, saying:

“I don’t think any of these currencies can ever be stable because there’s no value to stable them. There’s no value to store. The only cryptocurrencies that would work are cryptocurrencies that are backed by a real commodity, like gold.”

What followed was an advert for his own gold-backed value transfer platform, Gold Money.

Coming away from the interview, one gets the impression that Peter is tied to a very traditional ethos regarding what qualifies as an effective currency, and may end up surprised by what’s to come.

With that said, I’m sure everyone reading this would agree that he has a point – after all, people don’t really use crypto as currency at the moment. At least not yet. But a quick glance at the crypto headlines reveals several prominent coins opening up crypto-fiat ATM’s, while online marketplaces are popping up where people can make purchases using crypto just as though they were on eBay or Amazon.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.4 stars on average, based on 25 rated postsGreg Thomson is a full-time crypto writer and digital nomad. He eats ICOs for breakfast and bleeds altcoins. Wherever he lays his public key is his home.




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Analysis

Crypto Update: Bitcoin Holds $7350 as Altcoins Show Weakness

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It has been another two-faced session so far in the cryptocurrency segment, as Bitcoin’s strength was in stark contrast with the widespread weakness among altcoins. Besides BTC only Dash is slightly in the green among the top 20 coins, and most of the majors are back in their previous trading ranges after the failed break-out, with still only Bitcoin sporting a short-term buy signal according to our trend model.

The mixed, but dominantly still bearish short-term picture means that traders should still be cautious with new positions, as, despite Bitcoin’s ongoing rally, a test of the June lows is still likely with regards to most of the majors, and new lows are also possible in the coming weeks.

For now, the trading ranges that developed after the June lows are still intact, and the previously negatively diverging coins should still be closely monitored for signs of weakness. On the contrary, should a distinct bullish leadership emerge, a trend change would be more likely, but for now, the technical evidence suggests that the segment-wide downtrend is still intact.

BTC/USD, 4-Hour Chart Analysis

Bitcoin avoided a breakdown below its break-out levels yesterday despite the widespread altcoin weakness and it managed to recover above the $7350 support/resistance level, keeping the bullish move intact. That said, the coin failed to trigger any form of follow-through among the majors, and that makes the break-out suspicious. Further support is at the line-in-the-sand $7000 level, at $6750, and $6500, while primary resistance is ahead at $7650.

Weak Bounce in Altcoins Following the Failed Break-Out

ETH/USD, 4-Hour Chart Analysis

No altcoins triggered a short-term buy signal and most of the currencies experienced a failed breakout, but today the segment stabilized and for now, the June lows are safe. Ethereum continues to be relatively weak from a short-term perspective, as the coin settled down near the $475 level, failing to rally back towards $500.

A move the lower end of the range is likely now, with primary support found at $450, with other levels at $420, $400, $380, and $360, and with further resistance ahead between $555 and $575.

DASH/USD, 4-Hour Chart Analysis

Thanks to its scarce liquidity, Dash turned very volatile during yesterday’s wild session, but despite the spikes on several exchanges, the coin remained in a similar technical setup as Litecoin, NEO, and Monero, the other relatively weak coins. These coins failed to recover above the structural breakdown levels, and remained on a long-term sell signal, despite Bitcoin’s encouraging rally. Dash should durably recover above $265 to trigger a short-term buy signal, but a move back to $215 seems more likely now.

XRP/USDT, 4-Hour Chart Analysis

Ripple is also among the weaker coins today and it failed to stay above the $0.49 resistance level, despite the intraday rally. Now XRP is still above the key long-term level which coincides with June low, but a test of that zone is likely in the coming weeks, as the short-term setup is still bearish. Further resistance is ahead at $0.54 and at $0.575, while primary support is now found at $0.45.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 296 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Bitcoin Price and Seasonality: The Coming Rally? 

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A confluence of technical and fundamental indicators has sparked a big rally in the price of bitcoin this week. The cryptocurrency has found support at $7,400 and, after a short breather, appears poised to test $8,000 in relatively short order.

While the debate over bitcoin’s short-term outlook continues, a historical price analysis reveals that the summer sizzle is nothing new. In fact, the months of July and August tend to exhibit strongly bullish patterns going back six years.

Bitcoin’s Hot Summers

The adage “sell in May and walk away” aptly describes trading patterns of traditional markets such as stocks but appears to go against the grain of bitcoin’s price patterns. Historically, bitcoin has generated large returns in the summer months. Going back to 2012, the only major outlier was 2014 when bitcoin rallied in July but fell in August.

While bitcoin has rallied over the past 48 hours, its gains for the month of July have been modest in comparison to previous years. A rosy August outlook suggests prices could be poised for a bigger breakout in the near term.

Although past performance is no guarantee of future success, seasonality plays a vital role in our understanding of the financial markets. In fact, there is an entire literature devoted to understanding how seasonal influences affect market prices.

Bitcoin: Starting Slow and Finishing Strong

Market researchers have also identified price patterns at different points of the year, with the “January effect” and “Santa Claus rally” forming a critical backbone to our understanding of seasonality.

Unlike stocks, which typically rise in January, bitcoin usually struggles out of the gate. Going back six years, the bitcoin price has declined in January in the following years: 2012, 2014, 2015, 2016 and 2018. Given the relatively small sample size, it’s not entirely clear why bitcoin struggles to start the year. However, the most recent January downturn was not unexpected given the previous month’s massive peak.

Although bitcoin often starts the year in a defensive position, the price has historically rallied in December. To get there, we usually contend with another bumpy month in the form of September.

Against this backdrop, the worst months for bitcoin tend to be January, May and September. So far this year, January and May have been difficult months for the cryptocurrency. It remains to be seen whether history will repeat itself in the coming months.

Bitcoin Price Levels

After a brief dip, the bitcoin price has held relatively steady on Thursday, with values hovering well north of $7,400. Trading volumes are a healthy $5.6 billion, well above the minimum threshold that usually accompanies a major rally attempt.

Bitcoin continues to trade near 40-day highs. Following the successful defense of $7,200, the bulls could be in position to extend the rally toward $8,000 – a level that has eluded BTC/USD for the better part of two months.

According to Barry Silbert, founder of the Digital Currency Group (DCG), the bitcoin price may have finally bottomed as institutional traders look to stake their position in the market.

In a recent interview with CNBC, Silbert said, “…the bears just kind of ran out of energy,” noting that bitcoin has managed to overcome overwhelming FUD.

“When the chair of the Fed says negative things about bitcoin, and Howard Marks says negative things about bitcoin, and Ken Griffin says negative things about bitcoin, and bitcoin doesn’t move, I think that’s a bullish sign,” he said.

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.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 502 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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