The last few days have been tough, and the market is taking a battering. Renaissance Macro Research, a financial and market analysis company has stated that if bitcoin is to ever recover it must not slip below its year-to-date support; if this happens, it may be “permanently impaired”.
Jeff deGraaf, head of technical research at the company and a respected provider of trading insights over many years, made the comments in a “note to clients” reported by CNBC news on Thursday (August 9th).
DeGraaf is reported to have written that, “parabolic moves are notoriously dangerous for short-sellers”. Further to this he explained that a top price usually develops with the emergence of a “descending triangle over months, with reduced volatility and little [fanfare]”. This has not been the case for bitcoin which has seen continued price contraction since December.
“Once the top is complete on the support violation, the security in question can often be considered permanently impaired or even ‘game‐over’. We are of course referencing Bitcoin as exhibit ‘A’ in today’s market.”
The bitcoin price, at the time of writing is just above $6,100; galling when one thinks about the $20,000 price of December and compounded by the fact that just two weeks ago, the price was above $8,000.
Still this year-to-date support remains a way off for the moment – bitcoin was about half the price it is now, at this point last year ($3,467 to be precise). However, we should hope to see the price move upwards soon as it was around September that we saw the first moves which signaled the beginning of the bull run which took the price to where we saw it in December.
It seems the ETF rejections of recent news have dealt faith in bitcoin a significant blow, with many investors deciding to pull their money out of the market after the rejection of the VanEck SolidX ETF this week. DeGraaf is one of the most respected voices on Wall Street in terms of chart analysis. He has been rated the No. 1 technical analyst by Institutional Investor Magazine for over 10 years through his career. His opinions certainly hold water.
However, there has also been positive news from Wall Street and other big business regarding crypto which may boost value in other areas. Use-case development remains the best hope for price recovery. Furthermore, we should bear in mind (although perhaps some might not be comforted by the fact), that after bitcoin’s peak in 2014, bitcoin’s year-to-date price was broken well and truly; yet it still recovered enough to give us the highs we saw in 2017. This might be the long haul, but we will get there.
Image Source: “Flickr”