Third quarter results are in the books – Bitcoin in the negative by 23%


Bitcoin

“It was the best of times, it was the worst of times.” Unfortunately, the latter phrasing applies to this last quarter for Bitcoin, its first negative quarter of the year and, by far, a shock to crypto enthusiasts across the globe. BTC is hovering about $8,300, a 23% loss for Q3, but on a positive note, the guillotine did not have its way last week. Bitcoin is still alive and breathing, and, according to quite a few analysts, it is positioned for a positive run in the long-term, especially as the critical halving event in May 2020 approaches.

Bitcoin, however, is not out of the woods yet, so to speak. Over the weekend, it did dip on occasion down into the mid- to high $7,000s, but behaving as if it knew that a critical quarter ending data was on hand, bulls responded to give it one last thrust for old time’s sake. The chart below from Coindesk was a snapshot before this upshot surge, but the annotations on the chart are a good “bridge” to what might occur next. With its last rise, Bitcoin firmly positioned itself above the 200-day moving average, a way station until the next battle cry from war-weary bulls and bears.

Although from time to time Bitcoin in the recent past has chosen to disobey technical imperatives, the 4-Hour chart on the right was “spot on” for the signal that it was sending. The Relative Strength Indicator (RSI) was ascending a nice slope, after bottoming out in oversold territory. The slight uptrend was a harbinger of the sudden rise that was to come from $7,856 up to $8,300 or so, back to safety from the dark depths.

As always, the question is “What’s next?” News outlets are chasing down their most favored analyst or scouring Twitter and Reddit for insights. Here are a few samples:

  • LiveBitcoinNews – Tom Lee: “Bitcoin is vulnerable, but I don’t think the thesis is broken. So, if someone saying does this mean bitcoin’s a broken story now, I mean, I think long term holders should not worry… The S&P being trendless is not good for bitcoin. The S&P needs to make a new high before bitcoin can break out.”
  • NewsBTC – Josh Rager: “In 2013’s bull market, BTC pulled back 75% over 89 days prior to a 1,600 run-up later in that same year. Bitcoin’s current downtrend does not put BTC decidedly out of a bull market, and investors can expect the uptrend to resume in the coming years.”
  • Coindesk – Omkar Godbole: “On the 4-hour chart, the indicator is charting higher lows, contradicting lower lows on price. That bullish divergence indicates a corrective bounce could be seen before the drop to $7,500-$7,070, as suggested by the long duration charts.”

The “Net/Net” seems to be that the long-term picture is unchanged. Bitcoin definitely has strong potential and fundamental underpinnings, if you look past 2019. Patterns of old are repeating, but even though BTC has bounced a bit to land at $8,300, analysts are still concerned that a deep dive in the $7,000s is still in the cards.

There still remains one last CME “gap” in that region to fill, which covers the area between $7,200 and $7,450. Last Friday, the CME’s monthly expiration date for its futures contracts, came and went. There had been biased contentions that large account holders had manipulated prices to force BTC down into the $8,000s, but this last gap continues to be unfilled, an anathema to a subset of crypto analysts.

So what is it to be this week for Bitcoin fans? Hash rates are back up to 100 tera-hashes, a good sign, but the Fear and Greed Index was “39” last week, and it just tumbled to “27”. The Tie’s Sentiment Index shows improvement, even though Twitter is alive with disconsolate voices. At times like these, caution is advised for these shark-infested crypto waters.

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Third quarter results are in the books – Bitcoin in the negative by 23%

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