The bitcoin rate has risen sharply since our previous price analysis. And since the bottom of last Monday, the rate is even more than 15 percent higher. Where does the rise come from? And what can we expect from next week?
Reversed shampoo caused the rate to rise
Yes okay, the real term is inverse head and shoulders. That is a price formation that often leads to a price increase. We talked about it on Tuesday, and it now seems to have come true! The shape of the price formation is already in the name, the price movement looks like a head and shoulders but then upside down:
- First you see that the rate forms a valley, that is the left shoulder.
- Then the bottom forms, that is the head.
- Then you see the right shoulder. This is at about the same level as the left shoulder.
The neckline is also important. This is the level from which the rate must rise. If that does not happen, we cannot speak of an inverse head and shoulders. The neckline is indicated by the orange bar on the graph.
Is bitcoin breaking the trend line?
The trend line of the chart below starts on October 25, when the Chinese president said he likes blockchain. That caused a price explosion of 40 percent in less than a day. Since then, the bitcoin rate has been in a downward trend.
In November alone, the race made four attempts to break the trend line. Now that the price is in a rising trend, bitcoin is quickly heading for the trend line. Does the course break through now? Then that is a very good sign. An increase towards 7,700 euros in the short term is then even possible (see our scenarios below).
Altcoins go with bitcoin
The bottom graph seems a bit messy, but we’ll explain. You look at the price development in the past month of the five largest crypto coins: bitcoin (red), ether, litecoin, XRP and bitcoin cash. Bitcoin is red, because the course runs through it like a red thread. And tether actually belongs, but that rate is stable.
Before the fall of Monday, November 25, the prices of the five crypto coins still diverged. You can see that in the first orange block. But it was striking that all five crypto coins fell just as fast last Monday. You can see that in the second orange block.
In general, other cryptos make roughly the same movements as bitcoin. When bitcoin rises, altcoins also rise. And vice versa.
What do we expect from the bitcoin rate?
We zoom out again, you are now looking at the longer term. You see the rate from the end of 2017 up to and including now, every candle covers a day.
Our expectations have not changed much compared to our previous analysis. That is not surprising, because not much has changed in the longer term either. The price continues to move down between two parallel trend lines. Together you call those two trend lines a channel. What do we expect from the rate?
Bullish
In the positive case, the price rises to the top of the channel. The top of the channel now amounts to 7,700 euros. That is subject to change because it depends on how fast bitcoin rises. And does bitcoin break out at the top of the channel? Then we can focus our eyes again on the summit of 2019, which is 12,200 euros.
Bearish
But is bitcoin falling? The exchange rate will then find support at the low point this week, around 6,000 euros.
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