I believe Bitcoin (BTC-USD) has reached its bottom at $6,500 following the recent market correction of +50% from its 2019 high. Considering the consolidation of technical factors and growing investor sentiment, I believe Bitcoin at sub-$8,000 may be considered a “discount“, thus a good time to start buying in.
Cryptocurrency markets are rebounding from support levels after the recent market rout. On November 29th, Bitcoin touched the $7,800 resistance, before being rejected sharply. Currently Bitcoin is floating near or below its previous resistance (now turned support), at $7,400.
Bitcoin’s drop to $6,500 may have signaled the bottom, as the strong rebound may indicate the beginning to a long-term bullish outlook.
1) On of the key points to consider is the CME Bitcoin Futures gap, a phenomenon where there is a price difference between the trading sessions in the futures market (which is more apparent for cryptocurrencies, as they trade non-stop, unlike traditional securities).
Source: TradingView, CME Group (Zack Norman)
The recent market correction occurred near the weekends, as futures closed while Bitcoin corrected to a 6-month low of $6,500. Taking a closer look at the inverse heads and shoulders patterns, there were 3 futures gaps that had been filled.
On December 4th, there was a pump and dump cycle which allowed Bitcoin to fill the futures gap caused by the strong rejection earlier, at the $7,800 resistance. However, Bitcoin soon revisited the $7,400 support once more.
There is one more gap that remained unfilled which could signal an upwards move soon, around the $8,200 resistance. Optionally, we would still need a clean and steady break above $7,800 to mark a confident bullish move.
2) Currently, Bitcoin is experiencing a strong consolidation of technical factors:
A compilation of indicators….