Bitcoin (BTC): the technical border between Bull Market and Bear Market is at $ 8,500

The bitcoin price grew almost 10% in the space of a week to start the year. But to argue in favor of a large Bull market in 2020, it is necessary to exceed a capital technical threshold: 8500 $.

Key technical factors of the article:

Bitcoin – technical analysis : the market tested this week the technical border between bull market and bear market for the year 2020, the $ 8,500 (€ 7,500).

Institutional traders : Bank and hedge fund traders have slightly reduced their net selling position (difference between contracts held for sale and those held for sale). The next data from the Commodity Futures Trading Commission (CFTC) in the United States is expected this evening.

CME Bitcoin Future Contract – TradingView

Since the double rebound on the support at $ 6,500 (€ 5,800), speculation is rife that the bitcoin price would have found its final low point here after 6 months of decline since $ 13,900 last June. A stabilization phase is indeed an essential step for a downward trend to reverse upward, but as we saw in a previous article, this is not enough.

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In order to be able to argue in favor of strong upside potential this year 2020, this stabilization sequence must be completed by going beyond a major resistance, like the upward technical breakout of resistance at $ 4,200 (3,700 €) last April.

Where is this major resistance to be overcome to give the starting point for a bull market around $ 13,900 and beyond?

Several technical tools combine to reveal the threshold of $ 8,500 (€ 7,500) as the "good" border between a strongly bullish mathematical expectation and the scenario of a fall towards $ 4,000. Besides, note that this week, this threshold was tested and that it interrupted the rebound.

This threshold of $ 8,500 (€ 7,500) is both a 50% Fibonacci retracement of the $ 3,100 / $ 13,900 movement, a strong resistance (SSB) of the ichimoku and more simply, a falling graphic resistance that joins all the peaks the most salient since last summer.

To overcome this technical obstacle, volume and institutional volume are required. According to the report Commitment Of Traders (COT) of the Commodity Futures Trading Commission (CFTC), pro traders have increased the size of their long position in the recent rebound, but this is still marginal and overall they remain net sellers. The next COT report is published tonight, its content will shed more light on the behavior of strong hands. I will detail this data in a future article at the beginning of next week.

Bitcoin chart with CFTC COT report

Follow Vincent Ganne on Trading View for further analysis on the financial markets.

The technical thresholds and the trend indicated above are based on the technical approach "price, momentum, sentiment, ichimoku". The data come from Bitstamp and the graphics of TradingView. You can consult the history of our technical points on cryptocurrencies in click here.

This content is offered for informational purposes only and does not constitute an investment recommendation. We remind you that theinvestment in crypto assets, including Bitcoin, is extremely risky. Cryptocurrency prices are likely to suffer significant andunpredictable price fluctuations.


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