Bitcoin Price Suffers Worst Monthly Losing Streak in 7 Years

    Bitcoin (BTC) chalked up its longest monthly losing streak in seven years in December.

    The leading cryptocurrency by market value closed at $3,689 on Dec. 31, representing a 13 percent drop from the monthly opening price of $4,241. That was the fifth straight monthly loss – its worst period since November 2011 – according to CoinDesk’s Bitcoin Price Index (BPI).

    Back then, BTC was trading below $20 and had depreciated by 81 percent in five months to November 2011. Notably, the tide had turned in favor of the bulls in the following months. BTC gained 59 percent in December 2011 and traded at record highs above $900 in November 2013.

    Bitcoin may repeat history by posting gains this month. After all, the cryptocurrency is looking oversold, having lost 52 percent in the last five months and 70 percent in 2018. Further, it is currently down 80 percent from the record high of $20,000 seen in December 2017.

    The follow-through, however, may lack vigor, as key fundamental metrics are still biased toward the bears. For instance, the widely followed network value transmitted (NVT) ratio of 108 is still reporting overbought conditions.

    Further, on technical charts, a long run bullish reversal would be confirmed above the 21-month exponential moving average (EMA) of $5,547.

    As of writing, BTC is trading at $3,790 on Bitstamp – up 1.86 percent on a 24-hour basis.

    Daily chart

    Bitcoin is likely charting an inverse head-and-shoulders bullish reversal pattern on the daily chart with the neckline resistance at 4,180.

    A UTC close above that level would open the doors to $5,200 (target as per the measured move method).

    More importantly, the resistance at $4,180 could be put to test soon as the 3-day chart is biased toward the bulls.

    3-day chart

    As seen above, BTC is holding well above the December low of $3,122. Therefore, the bullish view put forward by the positive divergence of the relative strength index (RSI) in mid-December is still valid.

    4-hour chart

    On the 4-hour chart, the 100-candle moving average (MA) is located by the 200-candle MA, indicating the path of least resistance is on the higher side.

    The chart also shows a falling channel breakout – a bullish pattern. BTC, therefore, could re-test recent highs above $4,200.


    • BTC could snap its five-month losing streak in January.
    • An inverse head-and-shoulders breakout, if confirmed, would validate the bullish divergence of the RSI seen on the 3-day chart and could yield a rally to $5,000 in the near-term.
    • The prospects of BTC posting gains in January would drop if prices find acceptance below the Dec. 27 low of $3,566.

    Disclosure: The author holds no cryptocurrency assets at the time of writing.

    Bitcoin image via Shutterstock; charts by Trading View

    Source link

    Stay in the Loop

    Get the daily email from CryptoNews that makes reading the news actually enjoyable. Join our mailing list to stay in the loop to stay informed, for free.

    Latest stories

    - Advertisement - spot_img

    You might also like...