With the drop to three-week lows, bitcoin has erased 76 percent of the corrective bounce from lows near $6,500 to $7,870 witnessed in the five days to Nov. 29.
Bitcoin continues to dial back gains seen in the last week of November amid a parabolic rise in bullish bets on the cryptocurrency.
The premier cryptocurrency fell to $6,828 on Monday to print the lowest level since Nov. 25 and was last seen changing hands near $6,900, according to CoinDesk’s Bitcoin Price Index.
While the cryptocurrency is losing ground, the number of bullish bets, as represented by the BTC/USD long positions on Bitfinex, have jumped to a record high of 44,523 contracts, surpassing the previous high of 40,193 reached in March 2018. Meanwhile, short positions have remained stuck largely in the 5,000–8,000 range.
As can be seen (above left), longs have increased by 78 percent in the last three weeks.
Interestingly, bullish bets began rising on Nov. 24 – a day before BTC bounced from six-month lows near $6,500 (above right) – and have continued to surge despite the recent pullback.
It’s likely that the sharp rise in longs represents traders who believe the cryptocurrency has made a major bottom near $6,500.
If that level comes into play again, investors may panic and square off (sell) their long positions, leading to deeper losses (a long squeeze).
Popular analyst Josh Rager thinks bitcoin will drop to $6,500, but after a minor bounce.
Meanwhile, Jacob Canfield, a guest trader on Forbes and CNBC, has forecast $5,500 as the bottom of the ongoing downtrend, which began from highs above $13,800 reached at the end of June.
Bitcoin violated support at $7,087 over the weekend and fell 3.27 percent on Monday, reinforcing the bearish view put forward by a lower high at $7,870 created on Nov. 29.
The descending 5- and 10-day averages and the below-50 reading on the relative strength index (RSI) indicate the path of least resistance is to the downside. The MACD histogram has also crossed below zero, confirming the bearish trend.
As such, bitcoin appears to be on track to test the Nov. 25 low of $6,511.
The RSI on the 4-hour chart is currently below 30, signaling oversold conditions. Hence, a minor bounce may be seen before the potential drop to lows near $6,500 suggested by the daily chart.
A corrective bounce, if any, would likely fade around the descending 10-day MA, currently at $7,166.
Bitcoin News Summary – June 24, 2019
The bull trend continued this week, driven by Bitcoin’s breakout above the $10,000 level. After breaking through $9,000 resistance, Bitcoin gained momentum to reach as high as $11,150 on Saturday. These are the highest levels seen since June of 2018. In fact, according to our very own HodlCalc, there have only been 70 days in all of Bitcoin’s existence, where buying and holding Bitcoin was considered unprofitable.
Facebook, the social media giant unveiled its highly anticipated and until-now secretive cryptocurrency, Libra. The Libra token will run on a blockchain network secured at launch by 100 distributed computer servers, which will eventually be fully governed by the independent Libra Association. The group of 28 founding members of the Libra Association includes Visa, Mastercard, PayPal, Uber, Lyft, Coinbase, and others.
Crypto mining hardware giant Bitmain is said to be relaunching its IPO plans, but this time in the U.S. instead of Hong Kong. Bitmain is consulting with advisers over a U.S. public listing, potentially in the second half of 2019.
And finally, Kaspersky Lab, the famous Russian anti-malware firm, released a cryptocurrency survey stating that 19% of people have bought some form of crypto. The report also stated that only 10% of people feel they understand how cryptocurrencies work. 31% of respondents said that crypto prices need to be more stable before they’d get involved.
