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Saturday Inferno market report

Saturday Inferno market report

Analysis

Welcome to the weekend, and our very last market update of 2018!

 

Well what a year and what a month for bitcoin! We’ve plunged from the heady heights of $20,000 to plumb the murky depths of $3,100, testing the 200-week moving average that so many thought would be unassailable. We’ve seen volatility return after one of the longest periods of stability in bitcoin’s history, that extended snooze that took place right through September, October, and the start of November before the dump below $6k. We’ve read countless headlines of bitcoin’s demise, seen crypto ridiculed and heard the drum banged for ETFs and conduits for institutional money like Bakkt more times than we can remember.

 

And so, we come to Saturday 29 December, and our last market report of 2018. Where do we stand, and where are we heading?

 

Well, the bounce from $3,100 – a range where historical support meets the 200 WMA – was strong. It broke multiple resistance levels but faltered at $4,250. The pullback saw a drop of 15% and bitcoin hitting support around $3,600. At the time of writing, we’re right in the middle of that range between $3,600 and $4,200, at the 50% fib level. Volumes have dried up and – while there are no certainties here – a move to the downside seems most likely. We’re still trading below all the major daily moving averages, the volumes aren’t here to sustain this price, and there’s strong resistance above.

 

Moreover, we have unfinished business. The macro trend is still bearish. We touched that 200 WMA but we need to retest it again to establish a bottom – or to break through it and bottom out lower. As the year draws to a close, it seems clear that the bear won’t leave until 2019. We are still expecting at least one final, major crash, at the very least, with targets down in the mid-to-low $2,000s. After that, we’d expect some consolidation and a period of stability; exactly where will depend on where BTC finally comes in to land after its year-long descent. But we know that with bitcoin, things can change in a heartbeat. And we know that along the way there will be many false starts and shakeouts.

 

No doubt 2019 will be a brighter year for bitcoin. Before then, the volatility brings opportunity. As we’ve said before, the winners in the next cycle will be determined by those who hold their nerve at the end of this one.

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