On October 25, the Bitcoin price initiated a massive upward move — increasing by 40 percent in less than 16 hours. This has caused many to call for the end of the correction and the beginning of the next bullish cycle.
While there are several possible reasons for this increase — specifically, positive news from China and an unfilled CME gap — there is no denying that what transpired has been one of the strongest pumps to date.
Crypto trader @BobLoukas stated that the potential for continuing upward movement in Bitcoin is very strong while urging everyone to go long.
Get out and enjoy the weekend, otherwise you’ll overthink your position.
You need to be long BTC across every timeframe IMO.
— Bob Loukas (@BobLoukas) October 26, 2019
While the movement on October 25 was indeed a very positive sign, let’s look at from a longer-term perspective and decide if it was indeed the beginning of a bullish trend.
Current Bitcoin Price Movement
The Bitcoin price initiated one of its strongest pumps to date — increasing by more than $3000 in less than 16 hours. This caused it to break out from the descending wedge it had been trading in since June 26, with significant volume.
The Bitcoin price initially broke out above the previous breakdown zone at $9400. However, this could not be sustained and the price decreased, creating a very long upper wick. This is an especially bearish sign.
As for the moving averages, the Bitcoin price is trading above the 200-day MA but below the 100-day MA — the latter reiterates the strong resistance at $9400.
Looking at the movement, the breakout from the pattern is a very strong sign. However, the failure to maintain the high post-breakout level diminishes its significance.
It is possible that we could see a short-term decrease, validating the previous resistance line.
In January 2019, an anonymous user posted price predictions for the Bitcoin price in six future dates.
While the first two predictions proved to be correct, the third one, predicting that the Bitcoin price will be $16,000 in October, is at risk of being invalidated.
Crypto trader @cryptobull noted these predictions since we are approaching the end of the month.
Did everyone forget about this? pic.twitter.com/E85x1w3kOs
— Crypto₿ull (@CryptoBull) October 15, 2019
Four days ago, this prediction looked to certainly be invalidated. However, the recent increase has made it slightly less implausible.
For the price to reach $16,000, we would need a 74 percent price increase within the next four days.
To put this into perspective, we would need to almost double the rate of increase during the highest point of the upward movement of the past two days.
Furthermore, since the price is likely to meet resistance at $12,000 and $13,700 (previous high), this still seems very unlikely.
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 are courtesy of Shutterstock, TradingView.
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