Speaking on CNBC yesterday, Fundstrat’s Robert Slyumer has given his opinion on the BTC charts. He believes that the current Bitcoin downtrend can only be reversed if the coin creates a short-term break, through the $6,300 mark.
The Bitcoin analyst studied the Bitcoin 15-day moving average charts from May and said:
“It really is a no-man’s land from a trading standpoint. I think if you’re a very short-term trader… we have a critical stop level at the $5,800-6000… with a resistance level of $6,300-6400. If it can rally through that, I think there’s a chance Bitcoin could start to turn.”
Bitcoin Downtrend: The Moving Average Charts
A 15-day moving average chart is a good indicator of market trends and can help forecast whether market trend is positive or negative. Slyumer looked back over Bitcoin's 15-day moving average charts going back to 2017.
These charts indicated that the crypto markets have shown progressively higher lows. A "very critical support" for the coin came at the $7,000 level this year and Slyumer focused on this point as a turning point. Because Bitcoin lost this support level and equally failed to cross the $7,800 resistance threshold on the upside, it created "lower highs" and began an overall downtrend.
Bitcoin is currently defending the $6,000 level and is trading below its 15-day MA trendline for late 2017, early 2018.
In Slyumer's opinion, $5,800-$6,000 is now the “absolutely critical” support level for Bitcoin. If it fails to hold then the coin will decline further to the $5,000-$5,500 range. Until we see the coin holding above this support level then the downtrend is inevitably going to continue.
Tom Lee Predicted Otherwise
Tom Lee's prediction that Bitcoin will reach $25,000 this year will be a tough rally for the coin in Slyumer's opinion: “At this point, we’re just seeing recovery rallies back to the 15-day, back to the downtrend, and it’s failing.”
Other major investors have also made similar predictions for Bitcoin price - notably billionaire Tim Draper who thinks the coin might reach $250,000 by 2022.
For now, though, Bitcoin is currently trading just under $6,100. The coin is down 9 percent from the beginning of the week.
Featured Image: DepositPhotos.com/ANDRANIK2017