Well, it’s safe to say that 2018 won’t be recalled joyfully by Bitcoin bulls at family gatherings this holiday season. Let’s take a look at the weekly chart:
The second week of November 2018 saw Bitcoin close below $6000 for the first time on the weekly time frame since the first week of November 2017. With bulls overwhelmed, bears continued to pile on the selling pressure and Bitcoin is now trading at just over the $3000 level.
For most of 2018, -DMI has held steadily above +DMI, so this has been a year dominated by bears. Of notable mention is that -DMI spiked higher upon Bitcoin’s break below $6000 and this has coincided with a rise in the ADX line, which has up until recently been trending down - thus indicative of a sideways trading environment.
With ADX now rising, a trending move to even lower depths is potentially in play if bears sustain their grip on the price action via a continued hold of -DMI above +DMI, as was similarly witnessed with Ethereum in recent months (Ethereum bulls failed to reclaim control over bears following my September blog post). In such a scenario, the $3000 level, which Bitcoin bulls have managed to stay above since the end of July 2017, could be tested. If it is breached and bears continue to command the market, the $2000 level is the next major support area.
Looking at other indicators, the MACD is below the signal line and is also below the baseline, so there is nothing from that perspective that suggests that bulls are going to regroup themselves for a trending move higher anytime soon. When I say trending, I mean a sustainable and prolonged directional move as we saw in 2017.
Ultimately, the price action suggests that a bumpy road lies ahead for Bitcoin bulls. The cryptocurrency, whose whitepaper was published just over a decade ago by its still unknown founder, remains a highly speculative asset that has spawned an outburst of growth and interest in digital assets at large. It remains to be seen what the future holds. In my view, the tackling of global sovereign debt may someday vindicate Bitcoin bulls that have contended its viability as a recognized worldwide unit of account.