November is over, and it’s been the worst November for bitcoin for many years. Traditionally a bullish month for crypto, this year the trend was too strong to fight. Bitcoin opened November at $6,304 (Bitstamp), and closed it at $3,971 – a 37% fall. Ouch.
Worse still, it doesn’t look like this month saw capitulation. Bitcoin bounced from a low of just under $3,500 – on historic resistance, right as expected – and the last weekly candle was a doji, but it simply lacked the conviction that a reversal needs. BTC failed to push through resistance at $4,300–$4,600, which is what would be expected in a traditional V-shaped recovery. Volumes have improved but are not especially high, and the overall trend has not been invalidated.
Further moves down should not come as a surprise under such circumstances. $3,200 is the immediate target, then $3,000 – and then a long, straight drop to $2,500 if that doesn’t hold. $3k is a significant level, representing an 85% drop from the peak: much the same amount as occurred in the last bear market, through 2014.
Yesterday, we saw resistance in the $3,800 zone tested but – amazingly – hold, with a bounce back above $3,900. It won’t be enough to dissipate bearish momentum, though, unless BTC climbs back above $4k and then that strong resistance zone at $4,300–$4,600. Confidence may be shaken by the news of a huge bitcoin wallet being emptied, sparking fears of a $250 million dump incoming. These stories have to be taken with a pinch of salt and we haven’t had time to look into this one yet; on previous occasions it turns out to have been exchanges moving funds from cold storage, or other benign explanations. Still, it’s not a happy narrative for traders who were already getting itchy fingers.
In all, it’s not a lot of fun for hodlers, but there’s some kind of consensus building that we’re nearing the bottom. We can’t tell when it will happen, but when it does it will be brutal. The best we can say is that it should be over fast and then it’s time to move forward to brighter things.
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