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Bitcoin’s Correction May Soon Be Over, Analyst Argues

3 mins
Updated by Adam James
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The Bitcoin price has reached a very significant support area created by the 0.5 Fib level. According to our analysis, it is very close to reaching a bottom — having possibly reached one near $6600.
During the week of November 17-24, the Bitcoin price decreased by roughly 20 percent. While the cause of the decrease is not known for certain, some have suggested that the regulatory moves by China, which can be considered anti-cryptocurrency, caused this substantial drop. It is certainly possible that the reaffirmation of China’s positive stance towards blockchain but negative stance towards cryptocurrencies could have been the cause of the rapid decrease. Cryptocurrency analyst and trader @davthewave stated that even though the Bitcoin price has decreased considerably during the last week, initiating a wave of panic in the market, it is right at the 0.5 Fib level of the entire upward move. Due to a previous fractal, he has previously stated that the correction is likely to end at the 0.5 level. Let’s look at this fractal more closely.

Bitcoin’s Previous Fractal

Looking at the logarithmic Fib levels, we can see that the Bitcoin price has reached the 0.5 Fib level of the entire move from $3300 to $13,700. Due to the position of the long-term support line, we could see the Bitcoin price trading inside a range between $6600-$8000 (0.5-0.618 Fib) until early 2020, when the 0.5 Fib level will coincide with the aforementioned support line. Afterward, it should continue to increase at the rate predicted by this channel. Bitcoin Future The fractal mentioned in the introduction compares the movement beginning in August 2016 to the current one beginning in December 2018. The December low coincides with the previous 0.5 Fib level. Also, if the current move takes half the time of the previous one, which seems likely due to the time when the top was reached we would see another touch of the support line in early 2020, as outlined in the image above. Bitcoin Fractal This would also coincide with the 200-week moving average (MA), another similarity with the previous correction. The Bitcoin price has never traded below this MA. Therefore, in early 2020, we could have a confluence of support at $6500, found by the long-term support line, 200-week MA, and the 0.5 Fib level. Bitcoin Moving Averages

Rate of Increase

The 0.5 Fib level has previously been used to identify the top. Also, @davthewave stated previously that he did not have faith in the parabolic move that took us to $13,700. The reason for this was the rate of increase. In order to evolve into a “serious asset class for investors,” BTC should not have a parabolic rate of increase. Looking at the entire channel, the 0.5 Fib level was near $14,000. Therefore, a decrease followed by a more gradual upward move would be more fitting for BTC — which is what is occurring currently. Bitcoin Rate Of Increase To conclude, the Bitcoin price is likely very near a bottom, due to a confluence of support. We could see the price trade in a range until the first few months of 2020 before the rate of increase intensifies.
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.
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In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.

Valdrin Tahiri
Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona graduate school of Economics. Shortly after graduating, he began writing...