Veteran Bitcoin analyst Willy Woo insists that bitcoin is still in the middle of a bearish trend. This contradicts the opinions of some experts who believe that the sell-off period has already come to an end, therefore expecting a bull ride to kick in.
Market Behaviour and Speculators
Since January 2018, bitcoin and the cryptocurrency market in general have been in a significant downtrend. This trend has seen the largest cryptocurrency lose over 65% of its value, and the market capitalization dropping from over $297 Billion to about $112 Billion as at the time of writing.
Before embarking on the downtrend, bitcoin experienced an unprecedented bullish ride. It’s price rose from around $3,500 to an all time high of just above $20,000 in a space of 4 months. This market behaviour attracted a lot of new monies into the cryptocurrency market, a phenomenon that was largely responsible to the growth in market capitalization.
Many speculators who invested in the cryptocurrency market in the course of the bull run have counted their losses and pulled out based on declining value. Others however have continued to hold onto their positions in anticipation of an eventual recovery. Whether the wait is a normal trend of occurrence or not in the bitcoin market cycle remains a subject of individual interpretation based on available information.
In an earlier report on CCN, billionaire Galaxy Digital founder Mike Novogratz predicted an exhaustion of the current downtrend, noting a retest of the breakout region that triggered the bullish run of late 2017. Novogratz explained that markets like to retrace breakouts, and at the point of his submission, bitcoin had retraced the entire “bubble” of the preceding upward run.
Novogratz isn’t the only one to have called an end to the prevailing downtrend, as CNN has reported a couple more predictions by renowned industry characters and analysts of an imminent reversal of trend. These calls have been repeatedly violated by declining prices that have seen the world’s number one cryptocurrency achieve lower lows for the season repeatedly.
The recent submission by Woo which emphasizes the sustained bearish or at least sideways momentum of bitcoin is based on the historical behaviour of the cryptocurrency.
“Bitcoin has seen only 3 bear markets in its history**. We are in the third one now. One signal we can use to determine the end of the bear is for the price to cross above its 200 day moving average.”
More Technical Analysis
Woo continued by supporting his claim using the Bitcoin NVT Ratio, which he terms as his favorite indicator. He explained that the NVT peaks during bear markets, although it has been criticised for being laggy in detecting bears, it is a leading indicator to signal the end of the bear. According to him, NVT returns to it’s normal range before the next accumulation phase, a condition that is yet to be fulfilled.
The bitcoin and altcoin market is one of the most closely watched in the global marketplace right now. Several factors are seen to be behind the prevailing market behaviour, most of which are fundamental in nature. While there are varying opinions on what would become of bitcoin and cryptocurrencies, the loudest among them insist on an eventual sustained uptrend. The main uncertainty in this case is about when this uptrend shall kick in.
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