Crypto Review 5 Sept 2018: Heavy BTC Falls

Well yesterday 5 September 2018 we suddenly saw a substantial fall in the BTC price out of the blue from around $7400 down to around $6400.

There were three main moves involved in this.

The first happened over 2 hours from $7400 to $7000.

Then over the following 8 hours came a further fall, from $7000 down to $6700.

The third step of the fall came during the following 4 hours taking the price down to around $6400.

All these falls came suddenly and were mainly caused by large volume trades.

So in less than 24 hours the Bitcoin price fell by $1000 from $7400 to $6400, representing a percentage fall of around 14%.

This effectively wiped out the steady gains the market had made in price over the last ten days. See the daily chart below:

 

So  we are now back at the base line support level of around $6400 that we have on the daily chart since July.

We had the excursion upwards from this support during the second half of July which reached around $8200. The first half of August saw this appreciation then fall back to the $6400 support line.

Yesterday’s sharp 14% fall has taken us back once again to this same support level.

So the question now is, will the price now resume its gradual upward rise once again, or are we in for a further fall which would then breach this support line?

Looking at the volume of BTCUSD shorts on Bitfinex, noticeable is that the volume actually increased clearly during the fall. So obviously there is clear bearish feeling out there that we could well be in for further falls (see chart below).

 

My BTC Market Forecast

What does the weekly chart tell us…

 

 

 

 

 

 

 

 

 

 

 

 

 

We have a descending wedge pattern. Since the market peak in December, we have had a scenario of trending lower highs, including up to the present time, we are still in this pattern. At the same time, since April at least, we have a largely holding support level of around $6400.

So we are at a decisive moment here.

Either the market will break out with lower lows and lower highs, and breaching the $6400 level, down to the psychologically important $6000 price point and possibly into the $5000s.

Or else we start to pick up and win back the lost value to the $7000 level and toward $8000 and beyond.

As to which pattern will emerge, the coming few days and beyond are going to be crucial in the development of this.

I am wary of opening new longs right now because of these sudden whale type big volume trades which occur and cause these sudden fluctuations.

Anticipation from the high volume of shorts opened right now suggests sentiment is expecting further short term falls. Obviously at some point these shorts will have to be closed, and this will then give a boost toward prices moving upwards once again.

My market prognosis for now is that we are in a market which is subject to very sudden sharp whale trading movement.  This can be upward as well as downward. This makes for a high-risk trading situation.

For the moment, I am watching and waiting to see how this plays out over the next few days particularly on the 4-hourly chart.

 

If I had to make a commitment one way or the other, it would most likely be bearish right now, at least for the day chart prognosis.

But I think I prefer to hold back for now before making new commitments to either longs or shorts until we have a clearer picture emerging of where we will be going from here.

Short-term outlook: cautiously bearish

 

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