The price of the bitcoin recovered Thursday to above $ 11,500 on the widely used crypto stock market Coinbase, after the cryptocurrency earlier this week had severely undermined, partly under the influence of uncertainty about more regulation in popular bitcoin markets such as South Korea and China.
Nearly all other cryptocurrencies subsided with the bitcoin at the beginning of the week and tumbled down on Wednesday, which in many cases had not been seen since the beginning of December.
But also crypto coins such as ethereum, ripple, bitcoin cash, litecoin and by far the most important cryptos managed to recover considerably on Thursday.
Read: what is ethereum and where can you act in it
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Crypto investors and analysts added the charts on Wednesday and Thursday to determine the most likely price trend of the bitcoin in the coming days.
Is the recovery above $ 11,500 a sign that the dip is over, or is there only a ‘dead cat bounce’, as some crypto bears argue.
The 100-day MA
Much has been said over the 100-day MA limit over the past few days, or the 100-day Moving Average, the average price over the 100 previous days.
When the price of a financial instrument breaks through the 100-day MA, at the top or the bottom, it is an indication that there may be a turnaround in the trend, or a trend reversal. The 200-day MA is also often used to see if the trend of an asset is still intact.
With regard to the 100-day MA, there is good news and bad news for the bitcoin (and many other cryptocurrencies that closely follow the bitcoin).
bitcoin chart 2017-18
The bad news is that the price of the bitcoin has been dipped below the 100-day MA in the past few days (see the bitcoin graph above). The good news is that for the time being the dip was short-lived.
The recovery of the woesday valley, when the bitcoin price hit the $ 9,199, the lowest level is 8 weeks, with a price increase of almost 26 percent on Wednesday / Thursday firm and fast.
However, analysts point out that in order to make the recovery more credible than a ‘dead cat bounce’ – the idea that even a dead cat will rebound just as the fall is fast and hard enough – the bitcoin rate is a daily closure. above $ 12,500 will have to show, and it is not yet that far.
As can be seen from the graph, the bitcoin has often been shot briefly below the 100-day MA during the past year, only to spring up again.
However, the valleys have remained higher and that is still the case today. That is a signal that the upward trend line is still intact.
On the other hand, since mid-December, when the bitcoin price briefly hit the $ 20,000, the tops are also lower, which in turn is a bearish signal. At the same time, that situation only came into effect for a short time and that this has also happened more often in the past year.
Some cryptocurrency analysts point out that the current situation is very similar to that of March 2017, when the bitcoin rate flirted for more than a week with the 100-day MA, before the road up was used again.
Even then, the Relative Strength Index was close to ‘oversold’, which is a sign that a decline has gone too fast and too fast.
Read: how can you act in bitcoin yourself?
So it is a bit of a ‘mixed bag’, as the Americans say. There are signs that the recovery of the bitcoin course is sustainable, which would mean that it is a good (buying) moment to step in. The price was $ 20,000 not long ago.
At the same time, there is also uncertainty about the sustainability of the recovery.
At least there was a lot of demand for bitcoin when the price came close to $ 9,000, which makes the probability of a decline below $ 9,000 less likely at the moment.
The historical price development of the bitcoin exchange rate provides an argument for repetition of what happened in March 2017, for example, when the price after a week of frolicking with the 100-day MA started to increase again. But according to crypto analysts, the price will have to close above $ 12,500.