Cryptocurrencies had become very popular since 2012 and from that point forward we saw a staggering bullish trend developing. It does not matter if we talk about Bitcoin, Ethereum or other brand new crypto currencies, the actual truth is that they managed to outperform most of the equities market. That performance brought them into attention and more and more traders are drawn into the cryptocurrencies trading arena. This material will focus on a technical and brief fundamental of Bitcoin, which could help you understand where the current price level is located, why that happened and what possible direction could the market have in the short or medium term horizon.

 

Bitcoin – the superstar of cryptocurrencies industry

By far the most popular cryptocurrencies out there, bitcoin had also managed to have the biggest appreciation of all the other competitors.

Looking at our monthly chart above, you can see the impressive bull run that started a few years ago. The price almost reached the 5000 figures, before retracing lower. There is, however, one particular details we should emphasize here. Looking at the overall performance, we marked two areas why are very interesting. Back in late 2013, the price surged impulsively on the upside, only to resume the downside afterwards.

The bullish candle that we highlighted is one of the biggest candles in the entire series and it was not followed by sustained buying.

Moving forward towards our second rectangle, you can see that the exact same pattern seems to take place again. We have a very large bullish candle, which is then followed by a red one, who managed to cover more than three thirds of the biggest bullish candle in the entire chart.

From an order flow perspective, that usually suggests an exhausted type setup had occurred and there is a high possibility of a market turn in the medium term.

Various analysts suggest that bitcoin is a speculative bubble that will most likely burst. John Spallanzani, chief macro specialist at GFI Group, says “It will have to retrace a bit more before we have enough power to break through”.

The cryptocurrencies industry had truly been under pressure, as issues like regulation and banning procedures in certain countries had raised concerns over their ability to take place of the traditional currencies in the future.

Risk Warning and Disclaimer

Trading cryptocurrencies on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in cryptocurrencies you should carefully consider your investment objectives, level of experience, and risk appetite. No information or opinion contained on this site should be taken as a solicitation or offer to buy or sell any currency, equity or other financial instruments or services. Past performance is no indication or guarantee of future performance.