Bitcoin Faces Biggest Monthly Price Drop of 2019 Despite Late Upturn
- Bitcoin looks set to end November on a negative note. A monthly close below $8,300 could yield a deeper drop in December, according to a popular analyst.
- The hourly chart continues to call a move higher to $7,800–$8,200. A bull reversal would be confirmed on the three-day chart if prices close (UTC) above $7,380 today.
- Acceptance below $6,515 would invalidate the bullish hammer candle seen on the three-day chart and invite stronger selling pressure.
Bitcoin looks poised to post the biggest monthly loss of 2019, despite the recent recovery from six-month lows.
At press time, the number one cryptocurrency is priced at $7,530 on Bitstamp, representing a 17.6 percent loss from the Nov. 1 opening price of $9,586.
The percentage drop would have been over 30 percent had prices stayed at the six-month low of $6,515 hit on Nov. 25.
Bitcoin last suffered a bigger monthly loss in November 2018. Back then, prices had tanked 37 percent, reviving the sell-off from the record high of $20,000 reached in December 2017. The cryptocurrency went on to hit a low of $3,122 in December 2018.
Bitcoin was expected to put on a good show in November with the miners’ reward halving due in May 2020. Historically, the cryptocurrency has picked up a bid six months ahead of the supply-cutting event.
This time, the run-up period has begun with a price drop, possibly due to miners selling off their bitcoin, as noted by popular analyst Willy Woo.
Bitcoin dropped from $13,000 to $7,500 in the third quarter and the price slide took a toll on miners’ profitability. Weak hands likely sold coins in November to recover their costs, strengthening bearish pressures around the cryptocurrency.
Looking forward, BTC may suffer a deeper drop in December if prices end the current month below $8,300, according to Woo.
Currently, a firm monthly
close (Nov. 30, UTC) above $8,300 looks unlikely. That said, prices could rise
to $8,000 before Saturday’s UTC close, as short-term technical charts are
flashing bullish signals.
Bitcoin has bounced up from the former resistance-turned-support of the inverse head-and-shoulders neckline at $7,360, reinforcing the bullish breakout.
The moving averages (MAs) are indicating the path of least resistance is to the higher side. For instance, the 50- and 200-hour MAs have produced a bullish crossover and the 100-day MA looks set to cross above the 200-hour MA soon.
Meanwhile, the
relative strength index is reporting bullish conditions with an above-50 print.
Bitcoin could rise to resistance near $7,800. A violation there would expose $8,200 (inverse head-and-shoulders target).
With the hourly chart
reporting bullish conditions, BTC’s current 3-day candle looks set to end
(Friday, UTC) above $7,380.
That would confirm the bearish-to-bullish trend change signaled by the hammer candle created in the three days to Nov. 26, and possibly yielding a rise to $8,200.
Sellers will likely make a strong comeback if prices drop below the hammer candle’s low of $6,515, although that looks unlikely at press time.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
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This article is intended as a news item to inform our readers of various events and developments that affect, or that might in the future affect, the value of the cryptocurrency described above. The information contained herein is not intended to provide, and it does not provide, sufficient information to form the basis for an investment decision, and you should not rely on this information for that purpose. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.
