- Bitcoin looks set to end November on a negative note. A monthly close below $8,300 could yield a deeper drop in December, according to a popular analyst.
- The hourly chart continues to call a move higher to $7,800–$8,200. A bull reversal would be confirmed on the three-day chart if prices close (UTC) above $7,380 today.
- Acceptance below $6,515 would invalidate the bullish hammer candle seen on the three-day chart and invite stronger selling pressure.
Bitcoin looks poised to post the biggest monthly loss of 2019, despite the recent recovery from six-month lows.
At press time, the number one cryptocurrency is priced at $7,530 on Bitstamp, representing a 17.6 percent loss from the Nov. 1 opening price of $9,586.
The percentage drop would have been over 30 percent had prices stayed at the six-month low of $6,515 hit on Nov. 25.
Bitcoin last suffered a bigger monthly loss in November 2018. Back then, prices had tanked 37 percent, reviving the sell-off from the record high of $20,000 reached in December 2017. The cryptocurrency went on to hit a low of $3,122 in December 2018.
Historical pattern fails
Bitcoin was expected to put on a good show in November with the miners’ reward halving due in May 2020. Historically, the cryptocurrency has picked up a bid six months ahead of the supply-cutting event.
This time, the run-up period has begun with a price drop, possibly due to miners selling off their bitcoin, as noted by popular analyst Willy Woo.
Bitcoin dropped from $13,000 to $7,500 in the third quarter and the price slide took a toll on miners’ profitability. Weak hands likely sold coins in November to recover their costs, strengthening bearish pressures around the cryptocurrency.
Looking forward, BTC may suffer a deeper drop in December if prices end the current month below $8,300, according to Woo.
Currently, a firm monthly
close (Nov. 30, UTC) above $8,300 looks unlikely. That said, prices could rise
to $8,000 before Saturday’s UTC close, as short-term technical charts are
flashing bullish signals.
Bitcoin has bounced up from the former resistance-turned-support of the inverse head-and-shoulders neckline at $7,360, reinforcing the bullish breakout.
The moving averages (MAs) are indicating the path of least resistance is to the higher side. For instance, the 50- and 200-hour MAs have produced a bullish crossover and the 100-day MA looks set to cross above the 200-hour MA soon.
relative strength index is reporting bullish conditions with an above-50 print.
Bitcoin could rise to resistance near $7,800. A violation there would expose $8,200 (inverse head-and-shoulders target).
With the hourly chart
reporting bullish conditions, BTC’s current 3-day candle looks set to end
(Friday, UTC) above $7,380.
That would confirm the bearish-to-bullish trend change signaled by the hammer candle created in the three days to Nov. 26, and possibly yielding a rise to $8,200.
Sellers will likely make a strong comeback if prices drop below the hammer candle’s low of $6,515, although that looks unlikely at press time.
Disclosure: The author holds no cryptocurrency assets at the time of writing.