Bitcoin price analysis: price on slippery ice, price drops by 500 euros in a week

Phew, that was not a good week for the bitcoin course. On Monday, bitcoin was still worth 7,600 euros, now the counter is 7,100 euros. Bitcoin surrendered more than 7.5 percent from Monday’s high point to Friday’s low point.

Bitcoin on smooth ice

The graph below shows the bitcoin rate in euros. Each candle on the graph represents one hour. Since October 11, the course has mainly been going downhill. Bitcoin does not seem to be able to move out of the falling red trend line.

In addition, the course is now on slippery ice. Bitcoin moves on and near the support zone. We indicate this support with the blue rectangle on the graph below:

Phew, that was not a good week for the bitcoin course. On Monday, bitcoin was still worth 7,600 euros, now the counter is 7,100 euros. Bitcoin surrendered more than 7.5 percent from Monday’s high point to Friday’s low point.

Bitcoin on smooth ice

The graph below shows the bitcoin rate in euros. Each candle on the graph represents one hour. Since October 11, the course has mainly been going downhill. Bitcoin does not seem to be able to move out of the falling red trend line.

In addition, the course is now on slippery ice. Bitcoin moves on and near the support zone. We indicate this support with the blue rectangle on the graph below:

Death cross lurking

We zoom out a bit on the graph. You look at the rate at day level, from the end of 2017 to the present.

A death cross seems to be coming, and that can be bad for the course in the medium term. In the case of a death cross, a short-term Moving Average drops below a long-term Moving Average. Most analysts then compare the 50-day MA with the 200-day MA.

This happened for the last time on March 21, 2018. When many analysts knew for sure, the bear market had begun.

Whether that also happens? It is not necessary, but it will be exciting.

But the course can recover in the short term

We zoom in on the graph again, you look at the rate at four-hour level.

In the short term, the exchange rate can recover. There seems to be a divergence between the course and the RSI. The RSI makes higher bottoms, and the course makes lower bottoms. This may mean that the price will go up a bit in the short term.

Where does the bitcoin course go?

It sounds cliché, but it can go in all directions. As always, we therefore describe two scenarios: positive (bullish) and negative (bearish).

Bearish
Bitcoin is now very close to the support. In addition, there may soon be a death cross. What if bitcoin drops even further? Then the next support is at 6,700 euros.

Bullish
The divergence is then a good sign. If bitcoin no longer moves sideways, the rate can rise to 7,800 euros. This had also been an important resistance in recent weeks.

New indicator: the Volume Weight Average price

In this technical analysis there is also room for a new indicator. This time we cover the Volume Weight Average Price, or in short the VWAP. A whole mouth full. The VWAP is an approach to what the entire market has paid on average for its bitcoins.

The indicator looks at data from the blockchain as well as the current market price. That way you can investigate how much has been paid on average for a bitcoin. You can see the VWAP on the graph below. It is the blue line that runs straight through the course.

It may sound a little boring, but it can give you an interesting picture. According to Willy Woo you discover with this indicator where the tops and bottoms of the course are. You can see that by looking at how far the current price differs from the VWAP.

And that also seems to be true. Every time the VWAP Ratio is higher than 3.8, bitcoin has reached a temporary peak. The last summit was mid-December 2017, when bitcoin was worth no less than 16,500 euros.

Conversely, you can also discover bottoms. If the VWAP ratio is lower than 0.3, you can speak of a bottom. The last time this happened was on December 15, 2018. Then you could have one bitcoin for the spot price of 2,700 euros.

The VWAP also gives a picture of the trend. If the rate is above the VWAP, then the bitcoin rate is in a rising trend. We now appear to be in the same phase as in mid-2016, the start of the bull market.