The Bitcoin price is down over 5% this Sunday, as it appears that we are returning to a long term down-trend which has been in place, and holding fairly steady in its path, since the summer of 2014.
For a couple of weeks at the end of January, the Bitcoin world was full of optimism. With a strong upturn in price it seemed to many that we may have finally broken the digital currency’s long term decline in value. But looking at longer term charts – 90 or 180 days – it becomes clear that January’s spike was simply an overcorrection for the dip in early January which had taken the bitcoin price below the long term trend line.
As you can see from the above 180 day chart, there is a clear downward pattern with only relatively minor deviations from the long term trend since approximately July of last year. You can also see that over the past few days we have return back to that long line after a brief bull surge. This seems to me to be a bearish signal which may indicate that a further decline in the bitcoin price may be expected, unless something dramatic happens to break the trend.
With $200 seen as a key support level with strong psychological significance for many traders we may soon see whether this long term trend can be broken, as Dr. Tamer Sameeh believes , or whether the Bitcoin price will continue to fall lower.
Analysts are clearly divided on what it would take for Bitcoin’s fortunes to see a reversal. Recent positive news stories, such as the announcement of multiple regulated exchanges, have failed to make any kind of permanent impact. But as the number of applications built on top of the Bitcoin block chain continues to grow, it may just be that when the downtrend breaks it is simply the result of a gradually increasing demand rather than a big news story.
Image Credit: Coinmarketcap.com.