Will Bitcoin ever pass $5000 or is it the end of Bitcoin’s rise?
The upward trend of BTCUSD has had an initial trend break with the lower low formed after the news of Chinese authorities suspending trading on some Chinese bitcoin exchanges. This also corresponds with the oversold area on the RSI. Now an inverted hammer or doji has formed, indicating sellers amassing. If we continue to see long shadows or the price dropping for the rest of the week then the sellers might be outweighing the buyers and the price may continue to drop.
The RSI also indicates it is at overbought levels. If the price does not break past the recent high as indicated by the horizontal resistance line at $4980 then I would consider it a very bearish indication as the important higher high required for the upward trend continuation would not be formed.
My speculation is that many of the speculative holders who bought before the announcement of the Chinese authorities where hurting when the price fell, so when it recovered close to or just above the prices they may have got in, they are slowly starting to worry about the situation and may sell at these levels to protect their holdings. This is what may be currently seen with the dojis near the recent highs. If the price continues to weaken then others may join in with the hope not to experience the loss that occurred before.
Combining the above with recent news, the RSI indicator, bearish dojis and weakening trend indications, I would not recommend buying at current prices. Instead I would consider selling some holdings to lock in some profits, say 30% or 50%, then waiting for confirmation of trend highs or a break through past $4980 to start buying again.
I also looked at my previous study related to the Chinese Yuan (USDCNH) and its relationship to Bitcoin. This too is giving bearish signals.
Based on this and other studies I’ve done, I am giving a call to the end of the upward momentum of the price of Bitcoin. I don’t see it touching $5000, at least not for many years to come. I think as a long term investment it is time to get out or at least to short. If the price breaks much past $5000 I will be wrong and will re-assess the situation.
The RSI also indicates it is at overbought levels. If the price does not break past the recent high as indicated by the horizontal resistance line at $4980 then I would consider it a very bearish indication as the important higher high required for the upward trend continuation would not be formed.
My speculation is that many of the speculative holders who bought before the announcement of the Chinese authorities where hurting when the price fell, so when it recovered close to or just above the prices they may have got in, they are slowly starting to worry about the situation and may sell at these levels to protect their holdings. This is what may be currently seen with the dojis near the recent highs. If the price continues to weaken then others may join in with the hope not to experience the loss that occurred before.
Combining the above with recent news, the RSI indicator, bearish dojis and weakening trend indications, I would not recommend buying at current prices. Instead I would consider selling some holdings to lock in some profits, say 30% or 50%, then waiting for confirmation of trend highs or a break through past $4980 to start buying again.
I also looked at my previous study related to the Chinese Yuan (USDCNH) and its relationship to Bitcoin. This too is giving bearish signals.
Based on this and other studies I’ve done, I am giving a call to the end of the upward momentum of the price of Bitcoin. I don’t see it touching $5000, at least not for many years to come. I think as a long term investment it is time to get out or at least to short. If the price breaks much past $5000 I will be wrong and will re-assess the situation.
