After a series of sharp price declines throughout the week, Bitcoin (BTC) seems to be rediscovering itself and attempting 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 explanation of why he purchased 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
Market commentator LightCrypto explained why he bought BTC when it fell to $ 8,500- $ 8,600, down nearly 20% from its recent high of $ 10,500.
/ 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 sounded like a fool, I wanted to clarify why I bought Bitcoin at $ 8,500 – $ 8,600, a drop of nearly 20% from the recent peak. While the short side is dominating to keep pushing prices down, it seems to be 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 USD after reaching the nailing is 1,700 USD.
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 needs to buy and writes:
"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 Financial stimulus packages of governments around the world will help Bitcoin increase more strongly.
Optimistic signal
Well-known analyst Nick Chong has found that every time VIX, CBOE's volatility index is derived from the S&P 500 option data, surpassing the 30 level in the past 5 years, that's when BTC has found it. Its macro low.
.@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
A case in point, when VIX reached 30 in 2015, marked a macro bottom of $ 220 before 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.
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