Bitcoin About To Bounce?

We get it. Bitcoin’s performance has been a little disappointing since the beginning of 2018, especially compared to that $20,000 reached not long ago.

Earlier today, the world’s most famous cryptocurrency was trading at $7402, down 1.15 percent. Bitcoin remains on a difficult spot as bears continue to push prices down and the digital currency has failed several times to consolidate above resistances.

Fine. It’s true. Analysts are not entirely positive about the short term perspective for Bitcoin, but what if we took a wider look at the chart?

Technical analysis shows that Bitcoin might be reaching a bottom soon, which opens the doors to a fruitful recovery ahead. As a potential bounce target, the $10,000-$12,000 range is seen.

“While it is premature to conclude the correction is over, there was a positive technical development this week suggesting the first stage of a three-stage bottoming process is developing,” wrote Rob Sluymer, technical strategist at Fundstrat Global Advisors, to his clients.

Sluymer explained that the three stages of a bottoming include:

1. A deceleration of the downtrend

2. A recovery above the downtrend

3. A reversal of the actual downtrend

According to the chart, Bitcoin’s downtrend has been losing strength and there was a recovery slightly above the downtrend. Now again, the $7,000 support is calling for a bearish attack, but it could be an opportunity to rebounce back to previous levels.

“The 15-day moving average has been a good proxy for trends,” said Sluymer, adding that Bitcoin bulls keep their forecast at $25,000 by the end of this year.

While Sluymer is not going full aboard with the idea of a bullish movement, he thinks reducing the sell positioning might be a good idea for investors.

“We recommend tactical investors/traders begin reducing BTC short positions and begin phasing in long positions”.

FortFS