After a week of price drops, it seems Bitcoin has found itself and is trying to establish support to prepare for the next step.
Although many analysts think BTC is showing weakness, a well-known trader recently gave in-depth explanations of why he bought assets between $ 8,500 and $ 8,600, where it has been continuously retesting for the past two days.
The case for a Bitcoin Bullish reversal from $ 8,500
LightCrypto market commentator has explain the reason why he bought BTC when it fell to $ 8,500- $ 8,600, a drop of nearly 20% from the recent $ 10.5 high.
/ 1 At the risk of looking like a fool by Monday, I want to make the case for why I am a buyer of Bitcoin at the $ 8,500- $ 8,600 level, near 20% off the recent local high. In a sea of shorts frothing about a continued plunge, it seems like the contrarian position to adopt. pic.twitter.com/9A1zKxKtS7
– light (@LightCrypto) February 28, 2020
On Monday, I was like a fool, saying that I wanted to buy Bitcoin at $ 8,500 – $ 8,600, a drop of nearly 20% from the price at the time. While shorts are prevailing to keep pushing prices down, that's an opposing position to apply. "
In a Twitter thread, he outlined his stance on Bitcoin and commented that the asset will increase surprisingly when gold has fallen off the moon, saying one correlation is that gold has dropped below. $ 1,600 after reaching a close of $ 1,700.
Gold fell, “a sign that the macro market is getting very dark,” but Bitcoin is effectively defended at $ 8,500, and this is a sign that the cryptocurrency still has a support from buyer.
/ 3 Gold is down the most since 2013, possibly sold to cover margin calls – this is a further sign of an emotional and capitulatory macro environment. In all of this, Bitcoin has held, losing less on the day than gold (!). pic.twitter.com/EDcIYNNCyQ
– light (@LightCrypto) February 28, 2020
He said BTC had a need for bids and wrote:
"Market watchers have also seen huge market uptake when millions of dollars were sold at potential support levels. This action shows the difficulty of pushing prices down, and is an indicator of potential price increases, what to do now is to be patient. "
This somewhat optimistic technical picture is supported by the fundamentals of Bitcoin such as the upcoming halving in May 2020, the possibility of lowering interest rates of central banks in the world and the fiscal stimulus packages of governments around the world will help Bitcoin increase more strongly.
Optimistic signal
Well-known analyst Nick Chong has noticed that every time VIX, CBOE's volatility index, derived from the S&P 500 option data surpasses 30 in the last 5 years, that's when BTC was Find its macro lows.
.@CarpeNoctom suggested spikes in the VIX correlate (spurious?) with Bitcoin bottoms. He's not kidding.
Times the VIX passed 30 in the past 5 years:
Dec 23, 2018: a week after BTC fell to $ 3,150
Feb 3, 2018: when BTC bottomed at $ 6,500
Aug 22, 2015: when BTC bottomed at ~ $ 220 pic.twitter.com/vS7E60rNJp– Nick Chong (@_Nick_Chong) February 27, 2020
Case in point, a case when VIX reached 30 in 2015 marked a macro bottom at $ 220 ahead of the rally to $ 20,000. And more recently, VIX surpassed 30 in December 2018, just a week after Bitcoin found a bottom around $ 3,150.
Bitcoin price today | Source: Coinmarketcap
Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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