His reasons for the bearish outlook are the multiple death crosses made by moving averages (MA) and the fact that the price is below the breakdown level. We will look at them individually in more detail below.
Death crosses everywhere.— Nick Cote (@mBTCPiz) October 16, 2019
Price below the breakdown level.
Literally 0 signals for a bull market.
Just gambling on an unconfirmed bottom.
The best case is that we haven't seen new lows in a week. What a sad signal! https://t.co/2PoWzDqp4i
Bearish CrossesThe 20- (green), 50- (yellow), 100- (white), and 200- (blue) day moving averages (MAs) are shown in the graph below. The colored arrows represent bearish crosses sorted by time-frame. Therefore, the green arrow represents a short-term bearish cross, the yellow represents a medium-term bearish cross, and the white represents a long-term bearish cross. As we can see in the chart, the 20-day MA has crossed below all the others — and so has the 50-day MA. The only cross that has yet to occur is that between the 100- and 200-day MAs. The bullish cross between these two MAs occurred just as the price broke out in May. Therefore, it would be unsurprising if the downtrend were to begin with the same cross. However, if the price moves upwards, it is possible that the cross will be rejected. Due to the numerous other bearish crosses that have occurred, that seems unlikely.
Cryptocurrency Market Breakdown LevelThe important breakdown level noted earlier is found at $235 billion. The price found support above this level five times throughout June-September, before breaking down on September 24. The price increased to validate the level on October 13, before beginning the current downward move. It is a customary movement for the price of an asset to return and validate the previous resistance/support level after a breakout/breakdown. Therefore, in lieu of these developments, we agree with the statement made by Nick Cote in regards to the total cryptocurrency market cap. While it is possible that the price makes a bottom, there are no signals that suggest a bull market has begun. Therefore, to quote Nick, calling the bottom at the current level would be “gambling on an unconfirmed bottom”. Where do you think the cryptocurrency market cap will make a bottom? Let us know in the comments below.
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 Twitter, TradingView.
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.