Bitcoin Price Weekly Analysis – BTC/USD to Retest $6,000

Key Points

  • Bitcoin price is under heavy selling pressure as it tumbled below the $8,000 support against the US Dollar.
  • There is a crucial contracting triangle forming with support at $7,400 on the 4-hours chart of the BTC/USD pair (data feed from Kraken).
  • The pair may extend the current decline and it could even break the $7,400 and $7,000 support levels.

Bitcoin price is poised to extend declines below $7,000 against the US Dollar. BTC/USD’s correction towards the $8,000 and $8,500 levels are likely to be capped.

Bitcoin Price Bearish Trend

There was hardly any relief for bitcoin price as it failed to hold a major support at $8,400 against the US Dollar. The price declined and broke the $8,000 and $7,800 support levels. Earlier, there was a correction initiated from the $8,397 swing low. BTC price corrected and moved towards the $9,800 level where it faced sellers and started a fresh decline.

It fell and broke the last swing low of $8,397, opening the doors for more losses. It even traded below the 1.236 Fib extension of the last upside wave from the $8,397 low to $9,888 high. These all are bearish signs, which suggest further downsides in the near term. It seems like the price may test or it could even break the 1.618 Fib extension of the last upside wave from the $8,397 low to $9,888 high. There is also a crucial contracting triangle forming with support at $7,400 on the 4-hours chart of the BTC/USD pair.

Bitcoin Price Weekly Analysis BTC USD

Sellers could gain further control if there is a break below $7,400. The next major support is at $7,000. However, in the mentioned case, the price may extend declines and bitcoin could test $6,000. On the upside, the $8,000 level is a key resistance, followed by $8,400.

Looking at the technical indicators:              

4-hours MACD – The MACD for BTC/USD is moving in the bearish zone.

4-hours RSI (Relative Strength Index) – The RSI is currently reaching the 30 level.

Major Support Level – $7,400

Major Resistance Level – $8,400


Charts courtesy –Trading View

Subscribe to our newsletter

A lot of things can change over the course of nine years. In the Bitcoin world, we have seen major changes as well. While there is still work to be done, these are still the early stages of cryptocurrency in general. Adoption will only increase moving forward, as the best has yet to come.

The Bitcoin Story so Far

It has become evident Bitcoin has seen some interesting changes. Things have evolved in an interesting direction compared to nine years ago. It is safe to say the currency has come a very long way since the initial release. What started out as a niche project has turned into the world’s leading cryptocurrency. Moreover, cryptocurrency is now a phenomenon which can’t be ignored any longer.

As of last year, banks finally started showing an interest in Bitcoin. With a few institutions venturing into the world of Bitcoin futures, the tone is set. Other institutions even publicly acknowledge Bitcoin is a threat to their business model. All of this further confirms the best is yet to come for the world’s leading cryptocurrency.

At the same time, some problems have remained. Bitcoin still lacks scaling, it’s not the most technologically-advanced solution, and it is losing traction among early adopter merchants. However, that doesn’t mean people will stop using Bitcoin as a payment method all of a sudden either. In fact, it seems now is a good time to stop thinking about Bitcoin as just an investment vehicle.

What Comes Next for BTC?

The big question is how this industry will evolve over the next nine years. Right now, there is so much focus on the Bitcoin price, people tend to miss out on the big picture. Over one in two Square merchants is willing to experiment with BTC payments. That is an extremely positive signal for the cryptocurrency industry as a whole.When the merchants pay attention to BTC as a currency again, big things will happen eventually.

Moreover, the world’s leading cryptocurrency is maturing in the technology department as well. Scaling is becoming less of an issue with SegWit adoption on the rise. Add the Lightning Network to this trend, and things will only get better from here on out. Additionally, Rootstock is nearing completion. This project will bring smart contract technology to the Bitcoin network.

Additionally, we see the public perception of this cryptocurrency change as well. Adults are becoming aware how BTC can be a part of everyday life without too many problems. The global and borderless nature of this currency has a lot of potential when used properly. The industry also continues to create jobs left, right, and center, which should not be overlooked either. This is still the early stage of development, and a lot of things will change in the years to come.

Whenever the topic of Bitcoin regulation comes up, things often deteriorate rather quickly. That situation is no different where House Financial Services subcommittee meetings are concerned. Their most recent get-together raised a lot of questions and showed there is a massive bias toward cryptocurrencies.

The Subcommittee Hearing’s Purpose

On paper, the recent meeting of the House Financial Services subcommittee had positive intentions. The goal is to get an overview of the cryptocurrency landscape. based on that information, regulatory measures may be introduced in the future. Unfortunately, the members of this subcommittee are rather divided on cryptocurrencies altogether. It seems there is a very strong bias toward this form of money, which is not entirely surprising.

Representative Brad Sherman of California is convinced cryptocurrencies are a “crock”. He is not a fan of how people can make a lot of money from buying, selling, and trading cryptocurrencies. At the same time, most stock market traders make good money by sitting at home in their pajamas as well. It seems the bias against cryptocurrencies is mainly because it is cryptocurrency. An unregulated form of money that makes people millions is a thorn in the side of Sherman.

Airing these concerns during a subcommittee hearing is always positive, though. Everyone’s opinion matters when these groups get together. However, Sherman is not a big fan of the ICO business model either. In his opinion, ICOs are a “lie to the public” and a way to disguise unregulated IPOs. Again, this shows there is some need for regulation of sort sorts, albeit that is much easier said than done.

Regulation is Coming Eventually

Even though the bashing of Bitcoin is clearly visible, the regulatory discussions are far from over. Instead, we will see further subcommittee meetings to discuss the regulatory aspect of the “crypto craze”. Protecting investors is one of the main objects of this subcommittee. Things will move along rather slowly, though .The lack of understanding cryptocurrencies is a problem which is difficult to solve.

It seems a study on the ICO market will be published rather soon. Whether or not that study will be as biased as this subcommittee’s meeting, remains unknown. It is evident a ruleset needs to be put in place for both ICOs and the cryptocurrency at some point. What those rules will entail exactly, has yet to be determined. Once the report is published,  the subcommittee will “move in” to establish some new guidelines.

Luckily, not everyone is as biased to cryptocurrencies. Representative Tom Emmer of Minnesota is in favor of a hands-off approach, for the time being. Finding the balance between regulation and innovation is not all that easy. A mixed bag of responses from this House Financial Services subcommittee, with conflicting interests as well. All of this seems to indicate a unified regulation of cryptocurrency and ICOs is still far away.

Depending on whom you pose the question to, Bitcoin will either rebound or meet its demise. As of right now, some analysts are convinced the Bitcoin price will drop well below $5,000 pretty soon. If Market Securities Dubai’s Paul Day is to be believed, we will hit $2,800 in the not so distant future.

The Bitcoin Price Decline So Far

Anyone who has paid attention to Bitcoin this year may have noticed a peculiar trend. After hitting nearly $20,000 in late 2017, that same Bitcoin is now worth just over $8,200. Such a price trend is not uncommon in the world of cryptocurrency, though. The Bitcoin price goes through a bearish cycle virtually every year. Each time this happens, the value retraces from an all-time high by up to 90%. Right now, we are looking at a 53% decline with little improvement in sight.

Despite this negative trend, some speculators remain optimistic. John McAfee is a permabull when it comes to the Bitcoin price. His prediction of a value of $500,000 in the next two years still holds true to this date. Whether or not such a price goal is even remotely possible, is a different matter altogether. It will depend on merchant adoption, payment integrations, and new regulatory measures being deployed all over the world.

Speaking of regulation, things remain uncertain in this regard. South Korea still keeps an open mind, which is good to see. Additionally, we see India contemplating regulation of cryptocurrencies, yet no one knows how things will play out. In the US, cryptocurrency remains largely unregulated as well. The European Central Bank has no intention of intervening in this regard, which is rather interesting. A mixed bag of regulatory measures, as one would come to expect at this point.

The Bearish Bitcoin Price Outlook

Despite there being no real reason for it, the Bitcoin price is still struggling for traction. Bloomberg analysts are concerned this may only be the beginning “of the end”. More specifically, a prediction is made which puts the Bitcoin price at $2,800 in the very near future. This trend is known as a “death cross”, although it remains to be seen how things will play out.

According to the analysts, the chart trend paints a worrisome outlook. The “bubble” of 2017 has triggered a massive sell-off, although this trend could have materialized without such a big bull run last year as well. Market Securities Dubai’s Paul Day fears a  major Bitcoin price dip is looming just ahead. That is, assuming the current trends of 2018 will continue to repeat themselves in the coming weeks and months.

This prediction does not take any of the positive Bitcoin developments into account, though. A lot of things are happening behind the scenes. All of those developments can have a positive impact on the Bitcoin price in the long run. Charting and technical analysis are valuable tools, but they only tell part of the story. For now, we have to wait and see where the Bitcoin price will head during the remainder of 2018.

There have been a lot of stories in the news about people throwing away fortunes in Bitcoin as part of the general hysteria around cryptocurrency but a recent incident in Russia where a plane lost tons of gold and silver shows that hard currency is just as likely to go missing.

Russian Plane Drops Payload of Gold

The story of the British man who threw away a hard drive with 7,500 Bitcoin on it in a landfill and then sought permission to comb through the 350,000 tons of rubbish has been in the world press since late 2017.

There is also the story of the Hypnotherapist in the US state of South Carolina who charges one Bitcoin plus %5 of recovered funds to put people under and regress their memories in order to recover forgotten passwords.

These stories often come under headlines like the craziest things people do to recover lost Bitcoin and are written in a way to highlight that it’s not just the people that are crazy but the idea of Bitcoin and digital currency in general.

This presumption leaves out the fact that people, institutions, and governments lose huge amounts of fiat, hard cash all of the time.

Just yesterday a Russian Cargo plane that had stopped to refuel on its way from a Siberian gold mine lost part of its payload of over 200 bars of Dore, a gold-silver mix.

The 3.5-ton weight of bars were scattered over a remote area that was immediately closed down so locals couldn’t make off with any of the precious metals. In the end, officials reported they have recovered all of the 172 of 200 bars that fell from the plane without giving any details of how.

US Military Turned to Electronic Payments

That may be just one isolated instance of a freak accident but there is the ongoing situation of US payments and cash hordes kept in Afganistan and Iraq during wartime activity gone missing.

Audits going back ten years continually show huge amounts of US dollars, usually as pallets of cash simply disappearing from ‘secure’ locations. In one case alone $6 billion went missing from an Iraqi bank.

The majority of this money was earmarked for salaries of Iraqi and Afghani service men and contractors working along the US forces as well as cash kept on hand to pay for equipment and supplies.

Eventually, the US government decided to end the problem of skimming and outright theft by paying electronically. Sending money directly to contractor and service men’s bank accounts.

So what is the safest way to store and move currency, an encrypted string of numbers or a pallet full of paper?

Bitcoin Price Key Highlights

  • Bitcoin has fallen through support at $8000 and could be due for more losses if this serves as resistance moving forward.
  • Applying the Fib retracement tool shows the nearby resistance levels that could keep gains in check.
  • Technical indicators are also reflecting increased bearish pressure.

Bitcoin price has fallen through the key $8000 level and is showing signs of a pullback to nearby correction levels.

Technical Indicators Signals

The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. The gap is still pretty narrow so an upward crossover is still a possibility, although the 100 SMA is also near the 61.8% Fibonacci retracement level.

This could act to the area of interest’s strength as resistance, likely pushing bitcoin price to fall back to the swing low at $7682.4. Stochastic is crossing higher without reaching oversold conditions, which suggests that buyers are trying to hop in.

RSI is on the move up but appears to be changing its mind halfway through, so sellers could be putting up a fight. A break below the swing low could confirm that a longer-term selloff is underway.

Market Factors

It looks like the odds are stacking up against bitcoin price these days, as the looming G20 Summit is leading investors to worry that global leaders would take a hardline stance against cryptocurrencies.

So far, the headlines haven’t been so positive, as regulators are stepping up efforts to crackdown on potentially illegal activity while there have been reports of security glitches. IMF head Lagarde has called upon encryption experts to help catch criminal activity involving digital currencies as well.

And to top it all off, Google’s announcement on banning cryptocurrency ads by June also took a huge toll on bitcoin price this week. This followed a similar announcement by Facebook back in January, which drove prices around 12% lower then.

Dollar demand is also supported owing to expectations of a FOMC interest rate hike for next week as data has been mostly upbeat.


Bitcoin Price Key Highlights

  • Bitcoin price continues to exhibit downside momentum as it tests the 38.2% Fibonacci extension level on the daily time frame.
  • Recall that price broke below a double top pattern to indicate that bearish pressure is picking up.
  • The Fib extension tool shows the next potential downside targets if this behavior keeps up.

Bitcoin price appears to be aiming for the next support levels on the daily time frame as shown by the Fibonacci extension tool.

Technical Indicators Signals

The 100 SMA is above the longer-term 200 SMA on this time frame to indicate that the path of least resistance is to the upside. This suggests that bullish momentum is still present and that the longer-term uptrend could still resume.

However, the 100 SMA has been holding as dynamic resistance recently and bitcoin price has broken below the 200 SMA dynamic inflection point to signal that it could also hold as a ceiling from here.

Stochastic is indicating oversold conditions, though, so sellers must be exhausted from the latest drop. RSI has some room to fall, so bitcoin price might follow suit.

At the moment, bitcoin price is finding support at the 38.2% extension near the $8000 marl. Stronger selling pressure could take it down to the 50% extension near the swing low at $6450 then further on to the 76.4% extension at $3610.4. The full extension is located at $1063.4.

Reports that Google will ban cryptocurrency ads weighed heavily on bitcoin price, as well as other altcoins, starting in June. Recall that Facebook previously took similar action, banning ads on binary options, initial coin offerings and cryptocurrencies back in January.

To top it off, the CFTC issued a subpoena to major cryptocurrency exchange Bitfinex while the SEC announced an emergency asset freeze on an initial coin offering. Rumors are also swirling about potential bans in China, something that has already led to a sharp selloff in bitcoin in the past.

Bitcoin Price Key Highlights

  • Bitcoin price has formed lower highs and higher lows, creating a symmetrical triangle pattern on its 1-hour chart.
  • Technical indicators are showing that a downside break might be more likely to happen.
  • The chart pattern spans $8400 to $10,000 so the resulting move could be of the same height.

Bitcoin price is currently consolidating in a short-term symmetrical triangle while investors are waiting for the next big catalyst.

Technical Indicators Signals

The 100 SMA is below the longer-term 200 SMA on the 1-hour time frame, which suggests that the path of least resistance is to the downside. In other words, support is more likely to break than hold.

This could also mean that resistance is more likely to keep gains in check. The 200 SMA lines up with the top of the triangle to add to its strength as a ceiling.

However, it’s also worth noting that the gap between the moving averages is narrowing to signal a slowdown in selling momentum. Stochastic is turning lower to show that sellers still have the upper hand, while RSI looks ready to move south as well.

Market Factors

Bitcoin price gains are limited due to regulatory concerns and a few security glitches over the past few days. Geopolitical risk has picked up and dollar demand has waned on the latest developments in the White House, but surprisingly bitcoin has been unable to take advantage.

More recently, IMF head Lagarde called for a crackdown on bitcoin, citing that they should use the technology behind the digital currency to “fight fire with fire”. She also said cryptocurrencies are a “potentially major new vehicle for money laundering and the financing of terrorism.”

Although these remarks aren’t really new or surprising to bitcoin traders, it does weigh on sentiment for the general public. Risk-taking has also taken some hits these days as fears of a trade war limit investors appetite for higher-yielding assets.

Bitcoin Price Key Highlights

  • Bitcoin price seems to be having trouble making its way above the broken neckline of the double top.
  • This signals that bears are still very strong and could push price back down to the swing low or extension levels.
  • Technical indicators are also reflecting a slowdown in bullish pressure.

Bitcoin price could have more losses in the cards as it failed to bust through an area of interest.

Technical Indicators Signals

The 100 SMA is above the longer-term 200 SMA to signal that the path of least resistance is to the upside. However, the gap between the moving averages is narrowing to signal fading bullish momentum and a potential downward crossover. These moving averages are also close to the area of interest around $10,000 to add to its strength as a ceiling.

Bitcoin price could fall to the next Fib extension at the swing low or the 50% extension at $8176.8. The 61.8% extension is at $7775.2 then the 76.4% extension is at $7278.2. The full extension is at $6474.9.

Stochastic is on the move down to show that sellers have the upper hand, but RSI seems to be headed north. Turning lower could still draw bears to the mix and lead to a continuation of the decline.

Market Factors

The US dollar was actually weaker against its peers but bitcoin price was unable to take advantage of this. Reports that a big player dubbed “Tokyo whale” has been selling massive amounts of the cryptocurrency are being blamed for the recent slide, but there are also rumors that he has stopped dumping bitcoin.

As it turned out, a trustee of former bitcoin exchange Mt. Gox sold more than 35,000 bitcoin worth $400 million to pay off creditors still needs to liquidate the remaining 166,000 bitcoin.

Meanwhile, the US currency has its CPI and retail sales reports to contend with and traders seem to be bracing for weaker than expected results. If so, tightening expectations could take a hit and allow BTCUSD to recover.

The sharp fall of Bitcoin a month before the global stock market decline in February got traders’ attention. Is Bitcoin a barometer for the Stock Market?

The Correlation Between Bitcoin and Stocks

A number of investors have observed tandem moves between the cryptocurrency market and stocks, with the latter following the market sentiment of bitcoin and ‘associates’.

Doug Ramsey, Chief Investment Officer at Leuthold Group, a Minneapolis-based money manager, commented: “We’ve begun to watch bitcoin more closely as a sign of speculative enthusiasm. The top in bitcoin in December and stocks in January marked a peak in investor optimism.”

“We do view bitcoin as a sentiment indicator”, said Tom Forester, Chief Investment Officer at Forester Capital Management.

The catastrophic Crypto market dive in January was then followed by the first 10% decline in the S&P 500 in two years. If bitcoin is truly barometer, one would expect to see tandem moves again. A future pullback in stocks could be predicted once bitcoin falls first, and harder as usual.

While potentially correlated in market fluctuation, equities fell on fears of global protectionism led by US President Trump’s decision to slap tariffs on steel and aluminum. Bitcoin, on the other hand, dropped on the rising scrutiny from regulators and on the Mt Gox’s liquidation.

Investor sentiment, however, is what makes Bitcoin a potential barometer for the stock market. According to DataTrek Research, the correlation between the cryptocurrency and the S&P 500, during the stock market sell-off, jumped to its records-highs going back to the beginning of 2016. The research house found other shorter-term correlations as well.

This may be due to bitcoin’s nature as a highly volatile asset, which is the first to suffer from risk aversion whenever investor sentiment darkens. It’s part of being viewed as a risk asset by most market participants. Throughout history before bitcoin, other speculative investments would fall first in a market dive.

Analysts at the New York-based bank Morgan Stanley observed that the S&P 500’s forward price-to-earnings ratio topped out on the same day that the bitcoin price peaked. This “peak excitement” in the market was prompted by the US Congress passing a sweeping tax code overhaul in December 2017.

The idea of bitcoin as a barometer is not consensual and finds skepticism among a few experts: “I think that’s absurd. Ultimately, stock returns are grounded in the economy, corporate earnings, interest rates and inflation”, said Jason Ware, Chief Investment Officer at Albion Financial Group.

Nicholas Colas, co-founder of DataTrek, says the link is mostly found when the assets are falling. The Wall Street Journal’s Market Data Group found that the high correlation is only temporary, with markets trading in the same direction just over half of weekday trading sessions since the end of October.