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Breaking News: Bitcoin Price Drops Sharply Below $6,200

November 14, 2018 at 18:17 by Arathur Stephen

The cryptocurrency markets are currently in the red as most top digital coins are taking a hit, with some dropping over 20% in the last 24-hours. The reason behind the sharp decline at press time remains unknown.

Bitcoin Price Declines Unexpectedly

The flagship cryptocurrency, Bitcoin (BTC) has declined below the significant $6,000 support on Wednesday and is trading around $5,759 as at 17:00 GMT, after shredding of gains of over 9% in the past 24-hours. The sudden drop in price comes as BTC was becoming unusually stable, with its 30-day volatility index falling to levels it had not seen since December 2016.

As seen in the chart, the Relative Strength Index (RSI) has also dipped into the oversold region, which could mean the number one digital cryptocurrency may soon bounce back. Its support just below the $6,000 level has been tested several times so far in 2018 and has been able to hold.

In the meantime, this downturn has forced the cryptocurrency market capitalization past an uncomfortable milestone today, as it is dropping below the $200 billion mark on the eve of the contentious Bitcoin Cash hard fork.

On November 7, the crypto market traded as high as $220 billion, about the time the bulls were hoping that Bitcoin price would break above its 200-day Displaced Moving Average (DMA) and commence the long grind back to the all-time high it set in December 2017. That breakout, however, has failed to materialize

Since no major events seem to have contributed to the latest price declines, with some technical analysts have before today predicted that the ongoing bear market would extend into 2019, a longer period than many had previously expected.

Crypto Analyst Willy Woo: Bitcoin Price Decline Will Persist until Mid-2019

Willy Woo,  a trader, and technical analyst has shared his prediction that Bitcoin’s bad days are not over yet. He shared his opinion on his official Twitter handle saying that the bearish trend will continue until the second quarter of 2019.

Willy Woo’s Reasons for Bearish Prediction

Reason 1: NVT Signal Line breaking below support

Willy backed up his bearish prediction using technical analysis tools. One of them is the NVT signal trendline as you can see in the chart included in the tweet above. The analyst believes that the NVT signal trendline support is confined and there might be another bounce to the overbought zone before the next break. He also speculated that a break below the NVT support line will likely indicate the next major move down within a day or two.

Reason 2: Short positions are close to all-time highs

Will also believes short positions are quite close to all-time highs which might provide a reasonable opportunity for the bulls to take small profits as price moves to the top of the range. As the arrows in his chart below indicate, the price is expected to drop below the lower line support of the range subsequently.

Reason 3: OBV (On –Balance-Volume) is showing more sells

The OBV is a momentum indicator that uses volume uses volume flow and price to measure the buying and selling pressure of an instrument. Willy believes the OBV is selling off more than what price indicates with a price-OBV bearish divergence across several exchanges and time frames.

Reason 4: Accumulation not happening at current price levels

The final reason for his bearish prediction is that the current volatility is very high to suggest an accumulation phase will happen at the current level as buyers are stepping in to prevent a bearish breakout. Meanwhile, accumulation zones are usually, according to him “marked by periods where horizontal price action meets low volatility.”

Moreover, several factors are still in place that could potentially reverse the bearish trend before the end of 2018. Notable figures such as Michael Novogratz and Tom Lee had claimed that a reversal in Bitcoin’s fortunes would be seen by Q2 next year as institutional investors begin interacting with the markets.

If you have any questions and comments on Bitcoin today, use the form below to reply.

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