The price of bitcoin is going fast. But not in the way you would like (unless you go short). From Monday to Friday, the value of bitcoin fell by more than 18 percent. And today, the rate is falling by more than ten percent. Ai. In this article, we look back and look at next week.
Bitcoin course breaks through important support
We first take the overall picture. The course has fallen due to important support. This support amounted to 6,700 and has been very important in the past six months:
- In May and June this value was the last hurdle to the peak of 12,200 euros.
- Bitcoin found its ground here last month, before the rate rocketed by forty percent.
And talking about forty percent, that profit has now evaporated. We are now even below the level at the end of October. Well, it can go fast in the cryptomarket:
The last Friday of the month in sight, what does that mean for bitcoin?
Next week is already the last full week of November. And that last full week is always exciting to keep an eye on. CME Group’s bitcoin futures contracts expire every last Friday of the month. That can also influence the price of bitcoin.
With the help of bitcoin futures you can bet on a price rise or fall. At CME Group these contracts are settled in dollars. If you trade in bitcoin futures there, it has no direct influence on the bitcoin price.
But what if you bet on a price drop (going short) and the price just doesn’t want to fall? Then you can exert influence on the bitcoin market by selling a lot of bitcoin in a short time. That is of course only possible if you have a considerable amount of bitcoin.
In recent months, the timing of every fall has been very striking. Every last week of the month, the bitcoin rate fell by at least ten percent. You can see that on the graph below. It may well be that large investors at CME Group have a firm say. They may press the price to make a profit on their position.
What does that mean for next week? Suppose that bitcoin falls by ten percent compared to now, we arrive at a rate of approximately 6,100 euros. Of course we do not know whether it will turn out that way, the market remains unpredictable.
And whether this is also the reason for the declines last month remains guesswork. It is impossible to prove this with 100 percent certainty. In any case, it is interesting that bitcoin futures platform Bakkt will also offer futures settled in dollars from 9 December. The coming months will therefore be interesting to follow!
But what if ..
The bitcoin course has been moving in a huge bull flag all this time? For months, the bitcoin price has been moving between two trend lines that run parallel. Together with the large price movement upwards in the first half of 2019, that looks suspiciously like a bull flag.
A bull flag is a bullish continuation pattern. That sounds complicated, but it means that the positive price movement of the first half of 2019 can be continued. At least, if the bitcoin price moves from the two trend lines. Below you can see how that scenario could turn out:
This seems like a crazy scenario, but this is also possible. Price movements of tens of percent per day are not strange to bitcoin. From Friday 25 October to Saturday 26 October the rate even rose by 40 percent!
Whatever the bitcoin course will do, we will always keep you informed!
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