One possible explanation for Bitcoin's sharp plunge on September 25th is that this move is only the market's response to the "K-chart pattern" that investors have been paying attention to for three months.
After hitting a high of 13900 USD on June 26th, bitcoin price gradually formed a downward triangle on the K-line chart, and then integrated for three months. At the end of the integration, Bitcoin suddenly plunged from around $9,700 and once fell below $8,000.
Just the day before the plunge, Bakkt, which has received much attention, just launched bitcoin futures with physical settlement.
After experiencing a sudden decline, the famous cryptocurrency analysts Ledger Status, Tone vays and Crypto cred respectively expressed their views on this plunge.
Ledger states that the market needs to choose a direction. Cryptographic currency analyst Ledger Stass (whose real name is Brian Kruse Gard) expressed his opinion on Twitter. He believes that after three months of consolidation of Bitcoin, the market must choose the next direction.
Ledger also explained that after the price of Bitcoin fell, Bitcoin crossed a very important moving average (20-week moving average), further accelerating the decline. He added that,
In the previous bear market and bull market, the 20-week moving average was a very important support line and resistance line.
Tone vays believes that the market has been hesitant from the beginning. Tone Vays, a cryptocurrency analyst who is very popular on YouTube, believes that this "bloody crash" of Bitcoin has actually laid the groundwork several months ago.
Tone vays explained that although some cryptocurrency traders have been listing some indicators and data to prove that the upward trend of Bitcoin in the second quarter of this year is reasonable, for example, the transaction volume, transaction frequency and transaction amount of Bitcoin have increased substantially, while the data of currency-holding accounts and active trading accounts have even reached historical highs.
However, Tone vays pointed out that during this period, no new incremental funds actually entered the market in the form of new participants. In contrast, when Bitcoin soared to an all-time high of $20,000 in 20 17, as Bitcoin attracted a lot of public attention, a large number of new enterprises and individuals entered the market of cryptocurrency.
Tone vays added, "Almost all my fans started to pay attention to me in 20 17, and got a little attention at the beginning of 20 18, but in the first half of 20 19, I hardly saw anyone who paid attention to me."
Crypto cred believes that the market does not have enough motivation to do more. Crypto cred, another cryptocurrency analyst, also posted a technical analysis video on YouTube. He explained in the video that the triangular arrangement usually appears in an upward trend. After such integration, the price will generally continue to move in the same direction as before.
Therefore, after three months of integration, bitcoin prices should continue to rise. However, as we have seen in the market, bitcoin prices have not continued to rise, but have plummeted.
Crypto cred believes that this situation may indicate that the market does not have enough kinetic energy.
In addition, Crypto cred also believes that the three-month consolidation before Bitcoin is a range consolidation, not a triangle consolidation, so once the horizontal support line is broken, the market sentiment will become very pessimistic.
Crypto cred also pointed out that in the daily K-line chart of Bitcoin in September, the closing price of 24 days was lower than that of the previous day, which also showed that the whole trend was developing in a bad direction.
Future trends, how to develop? Ledger's status pointed out that bitcoin stepped back to the range of $8,000 or even lower, which is likely to prepare for follow-up actions.
He believes that bulls need to recover several key positions first. First, Bitcoin needs to go back above $8,400, which is also the position of the 200-day moving average.
He explained that if the price of Bitcoin can stand at $8,400 again, it may rise rapidly and $9,400 will be re-tested. After that, if Bitcoin can further break through the previous integration range, it is expected to create an annual high.
Unfortunately, the current 200-day moving average is becoming a strong resistance line. If bitcoin can't break through this position next, it is likely to further drop to a low of $6,000.
However, Ledger Status also pointed out that even if Bitcoin further falls to $6,000, technically, the long-term bullish trend has not been broken. He said,
"I remain bullish for a long time, unless Bitcoin falls below the 200-week moving average (currently about $4,600 and still rising), which marks the bottom of the previous two bear markets."
Finally, Ledger Status said that if the price of Bitcoin can rebound above the 200-day and 20-week moving averages, it will be quite optimistic for the market.
Up to now, the price of Bitcoin is $8,070.5, and the market value of Bitcoin accounts for about 67. 1% of the total market value of the entire cryptocurrency.