Being stabilised for a longer period of time is not characteristic of the Bitcoin and therefore the recent price drop shouldn’t be much of a surprise. By the end of last week we mentioned that there’s been a change in the signal sent by technical indicators and that traders should expect for such a scenario.
So, after a continuous growth and record highs, the cryptocurrency’s value fell for about 8% and reached a one-week low when it hit $425. However, the positive thing, for today at least, is the fact that the best value it noted in the past 24 hours is still over $460.
When it comes to news and events related to Bitcoin that are meaningful for the currency, we can say that it’s been a pretty calm weekend. The only analysis that caught our eye was the one by Market Watch, which highlights how blockchain feature could make the Bitcoin mainstream. The text explains how the blockchain provides a reliable registry of who owns what, plus it provides faster and cheaper transactions.
Therefore, the medium believes this seemingly unimportant feature might be just the thing that would help the digital currency to gain trust of more and more users.
Volume Grows as Price Falls
The situation on the price chart is not that scary yet; the current trading price of the cryptocurrency is $435.56, whereas the lowest point the Bitcoin reached in the last 24 hours is $425.4. It’s true that the low is also the lowest value of the currency we’ve seen in a week; nevertheless, the fact it’s over $425 makes it not that awful by itself.
The daily high is $460.54; that’s yet another reason to smile, since the threshold of $460 was reached one more time. It’s interesting to see that as the price has been falling, the volume has been growing and its current value is high 101,476. In comparison, on Friday it was only 46,256.39.
A value drop has noted in the year to date change as well, which is now settled at 38.8%. The market cap, on the other hand, is still over $6 B with its value of $6.12 B. Volatility is soaring at 19.5% after it was stuck under 16% for a week or so.
Indicators Now Signal Strong Sell
If by the end of last week the signal received by technical indicators and moving averages was neutral and unclear, today both are suggesting traders to sell. This is a sign that the Bitcoin might note additional price drops before the beginning of 2016.
For instance, six out of 11 technical indicators are pro-sell and only two are pro-buy. The 14-day RSI has a value of 41.065 and it’s one of the indicators that predict a price drop. In contrast, the Williams %R is set at -43.765 and it’s pro-buy.
A similar image can be seen at the moving averages where only four of them are recommending traders to buy, while eight are calling traders to sell. For example, the 200-day SMA has a strong value of $446.33, which is slightly better than the current trading price.
Possibly, this price drop is partially affected by the interest rate hike introduced by the Feds. Whatever the reason, we can see that the indicators are not favourable towards the cryptocurrency at this time and thus traders should have this in mind when they open positions.
Also, you mustn’t forget to place stop loss orders since at situations like these there might be unexpected price fluctuations that could cost you a lot.