It’s been two days and the bloodbath is continuing. Yesterday, we completely wiped out the gains made by the late October rally of 42% when we dropped to $7,400 level.
Today, we took an even bigger hit and went below $7,000 level to the six month low, to $6,785 on Bitstamp.
Bitcoin price drops to mid-May 2019 level but still up about 85% YTD, Source: TradingView
Historically, November has been the “best” month for Bitcoin price but after 2018 this time has also been the exception to that.
A friendly reminder to all bitcoin traders out there:
Stay patient and wait for an opportunity
— Bit฿it (@BitBitCrypto) November 22, 2019
This week, Bitcoin has lost 17% of its value but popular analyst PlanB says there is no need to panic about this. As he points out, it is normal behavior for the leading cryptocurrency and “nothing out of the ordinary.” Not to forget that we are still up about 85% YTD.
The stock to flow model that puts Bitcoin’s value at $100k before Christmas 2021 is also working “just fine.”
Some people panicking about this -17% week.
— PlanB (@100trillionUSD) November 22, 2019
However, this decline in price has surely turned the analysts and traders on Crypto Twitter (CT) bearish, so much so that the calls to $6,000 have made their return.
Analyst Bob Loukas sees Bitcoin crashing to $6,100 in the latter half of December as he says:
“Swan dive portion of the move in BTC on volume, you would think it bounces soon. But lower Cycle lows again, downtrend remains dominant and brings in much lower potential numbers into Dec.”
#bitcoin – the only asset class that can triple in price and lose 50% of it's value all in the same year.
And you think you're going to trade that easily.
Trade when you have a real edge only or sit on the sidelines and watch.
— Bob Loukas (@BobLoukas) November 22, 2019
This puts Bitcoin’s support level at $7000, $6400, $6000, $5500, and $5000, according to economist and analyst Alex Kruger.
Also, the 200 week MA is currently at $4900. But since 2015, the price has never closed more than 3% below its 200WMA.
Price action in the short term is completely irrelevant for investors.
— The Wolf Of All Streets (@scottmelker) November 22, 2019
Meanwhile, Bitcoin mining difficulty that took a drop of over 7% on Nov. 8 from it's all-time high has seen a slight uptick of 2%. The fact it didn’t crash means miners are not capitulating and likely not the driver behind this crash.
“The increase is neither bullish nor bearish in the short term. There is no linear relationship between difficulty changes and 1 week returns (neither forward nor backward),” stated Kruger.
Bitcoin difficulty adjusted +2% today, it didn't crash as would be the case when miners are capitulating.
The increase is neither bullish nor bearish in the short term. There is no linear relationship between difficulty changes and 1 week returns (neither forward nor backward). pic.twitter.com/quGmkMU5cd
— Alex Krüger (@krugermacro) November 21, 2019
A potential reason for this decline in price could be China issuing a new risk warning today and cracking down on cryptocurrency trading anew.
$1.5bln premium spent – still some way to go cryptos! https://t.co/Z9Ukm6NnOS
— skew (@skewdotcom) November 22, 2019