Bitcoin potential full reversal?
November 29, 2018 11:15 am,
The price of Bitcoin (BTC) has increased by more than 8 percent in the past 24 hours, as the dominant cryptocurrency recovered to $4000. On fiat to crypto exchanges like Coinbase and Bitstamp, BTC is yet to surpass $4000 mark but on crypto to crypto trading platforms, the prices of BTC hovers around $4100.
Fuelled by the corrective rally of BTC, major cryptocurrencies in the likes of Ripple (XRP) and Ethereum (ETH) recorded gains in the range of six to nine percent with ETH rebounding to $115. The cryptocurrency market has added $11 billion to its valuation and tokens such as VET or ZIL have recorded gains of around 15 to 20 percent.
BTC could suffer an 11 percent drop next week as the world’s leading cryptocurrency experiences its worst plunge since September 2017, with the asset falling below $3600. BTC is down more than 35 percent this week. The recent downturn started in mid-November when BTC fell abruptly below $6000. Since then, the world’s largest cryptocurrency continues to find new lows and has struggled to break out of the $4000 range.
Over the last week, the price of Bitcoin which was dangerously close to breaching the $4000 level, surged from $4050 to $4560 by more than 12%. On Coinbase and major fiat-to-crypto exchanges like Kraken, BTC dropped to as low as $4030 for a brief period of time and recovered to almost $4200 immediately after. It also rebounded to $4500 showing some resistance in the low $4000 region.
Ready for Reversal?
Prior to the 8% increase in the price of BTC, Crypto Rand, a prominent cryptocurrency trader, stated that depending on the daily close of BTC, the asset could experience a short-term trend reversal. The bullish hammer could lead the reversal. Since then, the BTC price along with its volume has increased substantially, bringing up the daily volume of the rest of the volume of the rest of the market from around $12 billion to $18 billion.
Currently, BTC faces a major resistance level in the range of $4100 to $4200. A breakout of the $4150 mark could signal a full trend reversal for BTC after weeks of a downward movement. But, based on the time frame and the past performance of asset in the last two weeks, a sudden breakout of large resistance levels remains a challenge for BTC.
The majority of small market cap tokens in the market demonstrated fairly large gains against the US dollar as the price of BTC demonstrated some momentum. But, tokens are down on average 30 to 50 percent against BTC and during a period in which US SEC is accelerating its investigation into dozens ICO projects that are generally considered to be securities, tokens present an extremely high risk, low reward opportunity.