Since the beginning of a prolonged downturn in Bitcoin prices in December 2017, the general public has lost its interest in the world’s most popular cryptocurrency. This fact once again proves the speculative nature of its turbulent price rally. However, it looks like BTC has been secretly planning a comeback. It is now traded at around $11 420, and was even higher earlier today at $12 800. BTC has reached the price level that has last been observed in January 2018. Is there any fuel left in Bitcoin and how could it be traded in the upcoming days and weeks? Read the full article to learn more.
What is happening to Bitcoin?
For quite some time Bitcoin has demonstrated no sign of positive dynamics. Since its all-time high in December 2017 (when 1BTC was worth almost $20 000) Bitcoin has lost over 80% of its value by December 2018. In February 2019 the world’s premiere cryptocurrency was traded at $3 400, which was just as low as in August 2017. The last time it took Bitcoin five months (August – December 2017) to get from $3 400 to $19 500. Five months have already passed since February, yet Bitcoin has ‘only’ reached the $12 800 mark so far*. Obviously, it takes BTC longer to reach the last record. Yet, the question is not how long will it take Bitcoin to grow, but rather how high will Bitcoin go this time and whether it is at all possible that it will reach a new high?
How to trade Bitcoin?
So, what does it mean for you as a trader? The most recent price surge — that has been in action for three months already — has created numerous trading opportunities and can be expected to create some more.
With Bitcoin prices as volatile as they come, it is hard to predict future performance of the asset. However, you can turn to technical analysis indicators to make an informed decision when trading CFDs on Bitcoin on the IQ Option trading platform.
All signals mentioned above have been received on a 30D graph with 12H candles.
Bollinger Bands, a popular volatility indicator, point to the end of one high-volatility period and the beginning of another. According to the former, a trend reversal is also possible: the BTC price has bounced off the upper band and can either continue to move down or go back up.
According to the trend-following indicator ADX, the overall trend strength is diminishing. Positive momentum is now on a par with negative one. It can very well be that the negative trend overtakes the positive one after a prolonged period of uncertainty. This is, however, not set in stone.
Chande Forecast Oscillator, a momentum indicator created with the purpose of estimating the future asset price, states that the future asset price might lower than the present price of Bitcoin. The indicator is below the zero line, yet it is slowly going up.
More than that, in order to go even higher, the price action will have to pass the resistance level at $ 12 800, the threshold that has not been cracked yet.
All in all, the forecast is moderate to negative with two out of three indicators providing no clear sign of a strong trend. It is not certain, however, wether the Bitcoin price will rebound or not, as it might as well continue moving down. It should also be noted that no technical analysis indicator is capable of providing 100% accurate signals.
*Information regarding past performance is not a reliable indicator of future performance.
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