Why Is Bitcoin Declining? And What's Next?

By Monfex on Altcoin Academy

The End Of The Bull Run Isn't Over Yet!

And all it takes to know that is a look at the charts. Bitcoin has broken back up above the $10,000 ceiling, and the correction that brought it down to $9,600 last week seems to be coming to an end. That doesn’t eliminate the risk of more losses, but the major news driving the price down last week has already passed, like the Libra hearings and the Trump tweet. Now that this is over, it should lead to a resumption of the upward trend we’ve seen most of the year.

So What Are The Charts Saying, Anyway?

Charts don’t talk, but a good technical analyst can get them to sing. For example, a clear break with the upper trendline of the short-term trendline can be seen, reversing the downtrend. The Stochastic is also in the oversold range, meaning that a near-term price appreciation is likely. There are a few countervailing signals, however — a declining MACD, for one, but the overall picture is of a corrective wave that is spent.

a near-term price appreciation is likely

How Are The Altcoins Doing?

They’ve more or less resumed their usual behavior of mimicking Bitcoin moves, with Ethereum dropping 5.67%, in line with Bitcoin’s fall of 5.75% over the week. On the other hand, Ripple and Litecoin both appreciated this week, 1.69% and 4.05% respectively. For Ripple, that may have to do with a recent Bank of America patent filing giving the name more exposure. And Litecoin may be reverting to its previous status as an outlier altcoin.

Can Anything Bring Power Back To The Bears?

It’s not entirely smooth sailing for Bitcoin from here. While individual US congresspeople have noted that there’s ‘…no capacity to kill Bitcoin…’, the overall mood on Capitol Hill has soured on cryptocurrency following the Libra hearings, with Treasury Secretary Steve Mnuchin mentioning that he’s ‘not a fan’ of Bitcoin. There’s also the possibility that the price breaches $12,000 and swiftly corrects back down under $9,000, which, coupled with increasing bad press, could send the price down for a while.

There’s also the possibility that the price breaches $12,000

What We Think

As fun as watching the daily charts can be, never forget that there’s plenty of evidence to support Bitcoin’s appreciation in the medium-to-long term or HODL. Linear regression models over the past four months have indicated nothing but an upward trend, while the Bitcoin network itself — the true fundamental of the cryptocurrency, has never been stronger. There’s also the Bitcoin halving due in a little under a year, which almost guarantees to cause price growth the closer we get to it. Due to the literally halved supply. In other words, corrections can and will happen, but it’s a good bet that Bitcoin isn’t going to see a repeat of 2018 any time soon.

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