Since the beginning of March, Bitcoin has lost about 30% of its value. The majority of the other cryptos, linked whether we like it or not with the Bitcoin, also followed this bearish trend.
Fundamental analysis/news (See page 2 for technical analysis)
Unlike conventional stocks, it is difficult to use fundamental news to predict the future price of Bitcoin. Indeed, it often reacts to news and information published on specialized sites.
In recent weeks, the bad news has thus reinforced the downward trend in Bitcoin. It is interesting to note that these negative news generally accentuate the current bearish trend, as if investors were feeding on bad news to amplify the movement. It is the same in bullish trend, any positive news, even of minor importance is amplified, causing accentuation of the rise.
The current events, which are in line with the market trend, therefore generally amplify the ongoing trend.
Nevertheless, we have had some bad news in recent days. Google has thus decided to follow the same path as Facebook by banning crypto-currency ads as of June.
In addition, Nobuaki Kobayashi, Bitcoin's Tokyo Whale liquidator of the Mt. Gox is selling a large number of Bitcoin on the market, worth about $1.9 billion.
The market knows this very well and N. Kobayashi proceeds step by step, not being able to sell all Bitcoins at once at the risk of causing a collapse in prices.
One could thus draw a very black picture of the actual situation but don’t forget: each current fact has two levels of reading:
Indeed, Google Adwords represents approximately 60% (2016 data) of the advertising investments made on the Internet. There will therefore be no difficulty in using another advertising provider. What's more, advertising is not the miracle tool that has made the world of crypto-currencies famous to everyone, far from it...
For the first investors, advertising has in no way influenced their desire to invest in crypto-currencies.
As far as the average investor is concerned, they have mainly discovered the crypto-currencies via the traditional media or by getting information on the internet.
In summary, this Google decision will have only a very limited impact on the real fundamentals of the crypto-currency market.
As said above, this is simply negative information that reinforces the negative market trend in the short term and panics investors "with fragile psychology".
Back to Kobayashi: yes, this gentleman sells many Bitcoins at this time. However, it would seem that these massive sales are not made at the best momentum, revealing a bad perception and market analysis on the part of the liquidator. (see an interesting article in french: https://www.crypto-france.com/mt-gox-liquidateur-judiciaire-chute-bitcoin/)
One can suppose that this liquidator, not having "sufficiently strong nerves", panics again during the current fall and proceeds once again to strong Bitcoins sales, leading the price down in a vicious circle.
Although he still has a lot of Bitcoins to sell, once the storm is over (understand once he has sold the rest to the bottom...), it will be time to take advantage of the upturn in the bullish trend without a cloud on the horizon (no more massive BTC sales to be expected).
Below, the times at which massive sales of BTCs were made from the same portfolio supposed to belong to N. Kobayashi:
From then on, there is no point rushing: after the storm always comes the good weather, life is made up of cycles, whatever the area.
You just have to wait patiently, like a lioness lurking in the tall grass, the sun on its back and the headwind, before finally rushing towards the prey. In our case, it will thus be necessary to show a good psychology and to scrutinize the technical indicators in search of the best point of buy.
Bitcoin Technical Analysis
There are two scenarios: one with an upward trend (green) and one with a downward trend (red).
The Bitcoin confirmed the double top started in mid-February and should in theory retrace down its height (from the neck line to the top).
If this is the case, it would allow it to rest on its oblique support (in blue), whose beginning is in September, which corresponds to the point of origin of the wave of rise which continued until December.
(Scenario in green)
This convergence of signals could be optimal to take position between 6600 and 6900. The technical indicators (RSI and MACD) will obviously have to show positive signals (above 40 for the RSI, in bullish trend) and the MACD will have to approache its signal zone (it can be below but must show an upward recovery).
The Bitcoin could then, from the beginning of April, come out on the increase of the triangle chartist (in blue) in which it is stuck since the end of December.
(Scenario in red)
Nevertheless, if the RSI continues to fall without showing signs of recovery or divergence bullish, it will be necessary to stay careful. Similarly, if the MACD continues to drop below its signal area.
The course could then test the support of the $6150 and even go down to a new lower, to the $3500.
In any case, we can welcome the increase in volumes, which, even if the sellers have the hand for the moment, show a revival of activity on the market.
Stay focused and calm, opportunities are coming!