Cutting straight to the chase, bitcoin price has undergone a massive correction. A long overdue correction at that. The higher the price rise when a correction is expected the deeper the correction when it does happen. And it has indeed happened, it’s still happening and is expected to reverse any day or time now (2nd Feb 2018).
This write-up will use simple trend analysis (trend lines and MA) to establish the weakening of the bull trend. These lines should not be looked at in isolation but rather alongside some cyclic indicators (e.g. RSI, MACD and StochRSI) and it’ll be clear why a strong reversal is due.
In simple terms, looking at USDTBTC 1D-candle and drawing a trend line between the lows of 15th Sept. 2017 and that made on the 12th of Nov. 2017 it will be evident that price has just hit that trend line. Looking at this analysis alongside the RSI indicator BTC is currently oversold. Being oversold and hitting a trend line a bounce is expected.
Similar to the simple analysis above, the 150EMA has most often been the reversal point for BTC. If this line is violated then the 200MA holds strong, such as on the 27th of May 2017. It may be correct to state that the 200MA line is the worst case reversal point for BTC price.
Today 2nd Feb. 2018 at the time of writing this, the 150EMA was violated on the 1st of Feb 2018 so I’m of the strong opinion that the 200MA ($USDT 7,784) SHOULD hold based on history. IF it doesn’t hold then BTC has indeed popped and the moon was $19,800 unless another untested MA support exists.
Disclaimer: Please ensure to do your own research before trading any cryptocurrency. The above article is the author’s person view and should not be taken as trading advice. Price projections contained therein are intended for informational purposes only and should not to be taken as investment advice.