Although Bitcoin has lost in the meantime over the weekend, the signs are still positive.
Bitcoin (BTC) fell back to an interim low of US$15,670 on November 15th today. The downturn came a few hours after BTC had climbed to $16,355, the latter indicating that the upward trend is continuing.
Accordingly, the downturn can be attributed to three main factors, all of which support the thesis that the upward trend is continuing. These are a „cleaning process“ at the weekend, a renewed test of the Moving Average (MA) and a renewed test of the parabolic price trend.
As Cointelegraph had reported, algorithmic traders assumed that there would be a downturn in the Bitcoin market by the weekend.
They justified this by saying that above the $16,500 mark there were a large number of sell orders, but these were not triggered after Bitcoin had at least already risen to $16,400. From this, the traders in turn concluded that the sell orders were genuine, which will sooner or later put selling pressure on them.
So although the market structure may have caused some traders and trading bots to sell, the cryptoanalyst sees the response as positive.
He believes that this is a cleansing of „negative technical price mechanisms“ and that downturns should rather be seen as buying opportunities. He writes accordingly:
„Conclusion on the weekend: We are cleaning ourselves from a few negative technical price mechanisms (4 hours RSI Div., 8 hours TD9). In the short and medium term, the fundamentals remain positive, with more and more crypto assets being withdrawn from crypto exchanges and more and more investors coming in. So downturns still remain a buying opportunity.“
Downturn is a positive test
In the daily chart, the downturn to $15,600 represents a retest of the 10-day Moving Averages (MA), the moving average of the last 10 days. The re-test is important because Bitcoin also did this test last week after a strong climb before moving further up.
However, if the course were to slip below the 10-day MA, then the downturn would probably solidify. However, the fact that Bitcoin has recently caught up here, as was the case on November 7, is a good sign in the short term.
On November 7, Bitcoin had slipped similarly sharply, although the price was still in a different price range. For example, just over a week ago it fell from $15,753 to $14,344, a loss of 5%. The market-leading crypto currency could find hold on the 10-day MA however.
In the following days, BTC hit a two-year high of $16,480, demonstrating the strength of the subsequent recovery.