On CoinDesk, Omkar Godbole offers his usual daily analysis of Bitcoin’s (BTC) price movements. It was last updated at 12:02 UTC time today. Godbole notes that BTC’s recent drop to 14-month lows shows it to be on track to experience its largest ever yearly loss.
A short 3 weeks ago, Bitcoin was trading at $6,300. This was already a drop of over half for the year-to-date according to CoinDesk’s Bitcoin Price Index. Back then, the conventional wisdom was that BTC would lessen its losses with a recovery rally, as it seemed to have bottomed out near $6,000 in the five months to October.
On November 14th that all changed as Bitcoin dived through the key 21-month exponential moving average (EMA) support level a sign that the sell off from the record high of around $20,000 of last December was resuming. On November 25 BTC dropped to $3,500 before regaining some ground.
A significant recovery appears unlikely before the end of the year according to Godbole as the bears seem in command. Bitcoin is likely to break the three-year winning streak with a 73 percent yearly drop, the largest on record.
BTC’s only previous annual loss was in 2014 with a dip of 57 percent. As long as prices hold below $5,959 this year’s loss will be the largest on record. Technical indicators suggest that Bitcoin could lose even more before the end of the year.
The weekly chart shows that the price of BTC has found acceptance below the crucial 200-week EMA and this strengthens the already bearish technical set-up indicated by the descending triangle breakdown that was already confirmed two weeks back.
The 4-hour chart also shows that Bitcoin has experience a symmetrical triangle breakdown a sign that the recent corrective balance ended at the November 29 high of $4,400. Now the bears are likely in control. The stacking order of the 50-candle below the 100-candle EMA and that in turn below the 200-candle EMA is a bearish formation. BTC could test the recent low of $3,474 within the next few days.
Based on his analysis Godbole concludes: “Bitcoin is on track to post its biggest annual price drop on record. That would change only if prices rise above $5,959. The symmetrical triangle breakdown seen in the 4-hour chart favors a drop to $3,474 (Nov. 25 low). Acceptance below that level would further strengthen the bear grip and open up downside toward the psychological support of $3,000. A short-term bullish reversal would be confirmed only above $4,400 (Nov. 29 high).”
According to CoinDesk data BTC opened 24 hours ago at $3,897 well below $4,000. The high has been only three dollars more at $3,900. It has fallen as low as $3,675 but has still not dropped as far as $3,474 but certainly could in the next few days as Godbole suggests. There has been no sign of a return above the $4,000 level a disappointing result for the bulls. There is no sign yet of a rally beyond the $5,959 mark that would keep this year from being the biggest loser for Bitcoin.
At 18:20 Central Standard Time the price of BTC was $3,720 not that much above its low yet. However, there are still many days left in December and things could change. Perhaps buyers will decide that at these prices they should be buying bitcoin and drive the price back up. The present price of Bitcoin can be found here.