Bitcoin shows a significant decline in its market value, which is not surprising based on the technical picture. Price for four days rested to the upper boundary of the descending medium term channel and could not break up. So the current decline looks quite logical.
It should be noted that at this stage in the location of two cross price trend: downward medium-term historical uptrend, the boundaries of which are top-down and entered the course. It may at some point provide support for the exchange rate from falling further.
It should be understood that the lower limit of the ascending channel runs in the area of $7200, to the goal now, and is the course. In this price range, there may be some consolidation, after which it will be necessary to observe the course more closely. If the price pass this level down, then the next target would be the area of$6000, if push up, then return to the district of$9200.
However, at the moment all the signals suggest further decline.
A few days before the maximum level on 7 January, the global trading volume of bitcoin reached a record high of $71.6 billion in 24 hours. In recent days, this indicator fluctuated around $15 billion, showing a decline of almost 80%.
The decline indicates two facts. First, active traders, who have received significant profits in the period of “bull” market, have lost ground because of the profound losses and were forced to become more patient and careful. Inexperienced intraday speculators could achieve serious success in a turbulent market, and in the fall to carry no less than a devastating loss. It is quite natural (though not very positive) and does not cause any reason for concern.
Secondly, and this is much more important common interest in cryptocurrency and the discussion around them began to decline. New investors who learned about this technology during the new year holidays, do not seek to buy bitcoins and ether.
Google Trends confirms this conclusion. The greatest interest in bitcoin has also been seen when one has reached a historic high of $20 000 in December and has since fallen to 80%. Position request “cryptocurrency,” a little better, but it is compared to a peak of 7 January dipped by 75%.
The overall situation in the search engines back to the level of the end of October, when the total market capitalization of cryptocurrencies was almost twice less, than now. If the ratio between the trading volume and price dynamics will remain, that is, the amount will be reduced stronger than prices, prices of cryptocurrencies are not necessarily revert to the level prior to the Nov. However, until a trend reversal, the market will remain bearish.
The review reflects the subjective position of the analyst Coinspot subject to personal trading style. Trading operations with cryptocurrency are increased risks due to the nature of the market. The editors are not responsible for your trading decisions and recommends trading only to those funds, the loss of which will not be critical.