Analytics of current market behavior suggest that a short term recovery is coming. A case can be made that the continuous price fluctuations create buying opportunities that short term traders can’t pass up. Despite the entrenched opposition created by short and Futures market positions, crypto still has a strong relevance and gained interest. The existance of Bitcoin is held by its functionality and by the growth in OTC volume. And it shows in movement trends developing in trading indexes.
Short term recovery is exhibited by technical analysis. Five days ago a Bloomberg’s report stated that the GTI VERA band indicator shows an upward move supported by purchasing trends. In addition, the Directional Movement Index (DMI) turned positive indicating the end of a sellout period and the start of buying. This is also shown by recent Relative strength Index (RSI) patterns that show that prices are oversold. These three indices summarize that buying pressure is building which signal a near-term breakout.
Furthermore, historical analysis also point to a inmminet recovery. News created in a tweet by a crypto analyst called Galaxy cited the approach of the 420 day mark which ended the 2015 bear market. He added that should our present 362 day bear market reach that mark, we’ll move “Towards several months of accumulation and a new bull cycle starting mid-late 2019.”
The historical analysis is interesting because talk of accumulation has been part of OTC market trading for some time. In 2018 the Tabb Group reported that OTC markets were three times larger than the exchange market. And Circle, Coinbase, and others reported gains in the billions of dollars in OTC trade volume. And now, starting next week Bittrex will also offer OTC trading.
It is hard to envision a return to Bitcoin’s all time high prices and beyond. However, the relevance of the blockchain and the myriad of innovative projects inspired by crypto technology makes it impossible not to link price with innovation. The value created by new ideas, eficiencies, and utilities make people want to buy and own crypto. Despite the gloom outlook, demand for Bitcoin remains strong; this is indicated by the buy orders already set in place in case Bitcoin reaches $3,000.
Critics and ill-wishers of Bitcoin and cryptocurrencies deliberately choose to ignore the fact that there is too much skin in the game. Companies, individuals, and governments have too much time, money, and effort invested in developing crypto. And there is a far bigger chance that it will succeed than it will fail.
Adoption may be a way off for now; realistically, a few years away. However, even though prices continue to fall, the market will right itself time and time again. Technical analysis is not a certainty but its data helps to undertand how the market behaves under specific conditions. And based on the present situation, there is a chance that with sufficient liquidity, prices might break out of the stubborn $4,000 resistance line and reach higher grounds.