Today, more positive news for the cryptocurrency industry flowed in when the Chinese government announced that it was releasing a series of instructional videos on cryptocurrencies — including specific ones on Bitcoin and Ethereum. This is especially positive since, during the speech by President Xi, no cryptocurrencies were mentioned.
While the Chinese government has announced plans to release its own state-backed cryptocurrency, this might mean that there are plans in store for the existing decentralized cryptocurrencies.
However, this flurry of news has not had a positive impact on the price of Bitcoin — which has been decreasing since October 26.
Cryptocurrency trader @cryptonekoz stated today that Bitcoin “looks terrible” and that a price drop is “inevitable.”
Not going to lie my friends. $BTC looks terrible.
Inevitable drop IMO is about to happen, bullish volume just isn’t there to support this recent rally up.
Still aiming for that 7.5k to even 6k market before a rise back up.
Might take several months, stay safe
— NekoZ (@CryptoNekoZ) October 31, 2019
He stated that likely reversal targets are found at $7500 and $6000 — and the drop will take several months to transpire. Let’s look at the price movement closely and see how likely this is.
Bitcoin’s Weekly Outlook
A look at the weekly time-frame reveals several bearish signs.
First, the current rally failed to close above the previous breakdown level at $10,000 on September 23. Instead, it created a long upper wick and is moving downward.
Secondly, the 10- and 20- week moving averages (MA) have made a bearish cross and are offering resistance to the price. This resistance coincides with that provided by the previous breakdown level, increasing its significance.
The short-term charts give a similarly bearish outlook.
A descending triangle has developed and a breakdown of the full length of the triangle would blow right through the minor support area at $8600 and reach $8000.
As for the support areas mentioned in the tweet, $7500 would make a double bottom and $6000 is a minor support area.
The price is currently holding on to the 200-day MA, which seems like the last line of defense. If we break below $7000-$7500, the minor support area of $6000 may not be enough to initiate a reversal and we may head towards $5000, instead.
However, the Bitcoin price must first reach $7500 in order to make an attempted prediction for its future movement.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
Images courtesy of Twitter, TradingView.
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