Bitcoin Facing Downtrend, Watch $4,200
Per prominent analyst Crypto Rand, Bitcoin (BTC) is entering “do or die” time. In a recent post, Rand drew attention to a “yearly downtrend channel resistance,” which began in April 2018, and has depressed BTC each time it has tried to foray higher.
In July of last year, BTC tried its hand at moving past $8,000 but failed, as the asset encountered this multi-month resistance level. In November, the cryptocurrency plummeted under $6,000, failing to maintain a medium-term, mildly-sloped uptrend and break the downtrend simultaneously. This move, as you likely know, brought BTC to $3,150 and the aggregate value of cryptocurrencies eerily close to $100 billion.
But since that move, things have arguably been on the up and up, as BTC has slowly trended higher to reach $4,000. Although many are calling for a rally to the moon, with analysts expecting for Bitcoin to see a pre-halving run, Rand says that BTC has one final boss to face.
This boss, if you haven’t guessed it already, is the aforementioned channel resistance, which sits at $4,200. Considering historical precedent, if BTC doesn’t break the level this time, the asset could be in for lower lows, potentially falling under $3,000 in a dramatic sell-off.
Rand isn’t the first to have remarked that the coming days and weeks will be of utmost importance for Bitcoin’s ongoing move higher. Trader Crypto Birb posted a chart (seen below) highlighting what he calls a “market decision point,” which will either perpetuate BTC’s rally or send it into a long-term consolidation trend between $1,360 and $3,000.
Analysts Hopeful
While it’s entirely possible for BTC to falter from here, failing to break out of the descending channel downtrend that has plagued this market for months on end, many argue that upside is in crypto’s cards.
In a series of research notes, tweets, and mainstream media appearances, Tom Lee, the co-founder of New York-based advisory outfit Fundstrat, explained that the 200-week moving average could be signalling a Bitcoin breakout in the short-term. Citing other catalysts that could boost this market, the cryptocurrency analyst drew attention to macro trends, like the weakening performance of the U.S. dollar and the expectation that emerging markets will outperform, as a way to give credence to the theory that cryptocurrencies are preparing for liftoff.
Fundamentally, this space’s prospects have seemingly begun to turn positive. Each and every day, news comes out regarding institutional involvement. Case in point, Fidelity Investments just recently launched its Bitcoin-centric custodian, amid a newfound push for institutions to divert funds into this budding space. Rumor has it that a multitude of global banks have begun to harness IBM’s WorldWire blockchain program to offer stablecoins, which only cements the theme that Wall Street is keeping a close eye on this technology.
Adoption has also been hot. Samsung, another South Korean technology giant, was recently revealed to have integrated a product called “Blockchain Keystore” into its Samsung S10 lineup, which launched last month to widespread hype. While a debate rages on about the specifics of the offering, with some claiming that it stores Bitcoin and others noting that it works much like an Ethereum-centric DApp browser, the impact that Keystore will have on adoption has been gauged as monumental.
