Cryptocurrencies: Is there a Floor for Bitcoin (BTC) Prices?
Since July 2018, every time Bitcoin (BTC) has fallen to about $6,100, it bounces.
It’s the coin’s line in the sand.
Even after considerable selling pressure, buyers emerge on every pullback near that price. It’s gotten so reliable you can buy around $6,100, wait for the likely push higher, sell and repeat.
There are two ways to track entry points with Bitcoin.
One is with a series of technical pivot points. The other is by tracking historic support.
Let’s start with the technical pivot points.
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In February 2018, Bitcoin fell to its lower Bollinger Band around $6,048.
Relative Strength (RSI) fell to its 30-line and became oversold. Fast Stochastics pulled back below its 20-line. Not long after, BTC rebounded to $11,958.
In March 2018, Bitcoin fell to its lower Band again around $6,526.
Relative Strength (RSI) fell to its 30-line and became oversold. Fast Stochastics pulled back below its 20-line. Not long after, BTC rebounded to nearly $10,000.
In June 2018, Bitcoin fell to its lower Band again around $5.826.
Relative Strength (RSI) fell to its 30-line and became oversold. Fast Stochastics pulled back below its 20-line. Not long after, BTC rebounded to nearly $8,200.
Also notice what happens when the upper Bollinger Band is hit or penetrated coupled with a move to 70 on RSI, and a spike on Fast Stochastic above its 80-line. BTC pivots and drops.
We can also pay close attention to the support line on BTC.
As you can see in this chart, BTC has fallen to and held the same line of support dating back to early January 2018. As long as it doesn’t break below that support line, use it as your buy point. Buy, wait for the rally, sell, repeat.
That’s the short-term way to make money with Bitcoin prices.
The other way is to buy and hold based on strengthening fundamentals and adoption.
Foe example, the CIO of Yale’s nearly $30 billion endowment, David Swensen just invested in two venture funds that focus on cryptocurrency.
Such an endorsement of assets is significant. Remember, Swensen is one of the top money manager pioneers, having managed one of the best-performing college endowments. Therefore, it is no wonder other endowments attempted to replicate his investment model.
Additionally, remember NASDAQ CEO Adena Friedman is open to becoming a crypto exchange with trading coins, like BTC. “NASDAQ would consider becoming a crypto exchange over time. If we do look at it and say ‘it’s time, people are ready for a more regulated market,’ for something that provides a fair experience for investors,” she says.
In addition, US CFTC Chairman J. Christopher Giancarlo says it’s here to stay, too.
“I think there is a future for them. I’m not sure they ever come to rival the dollar or other hard currencies,” he says, “but there’s a whole section of the world that really is hungry.”
According to him, digital assets have the potential to assist troubled economies around the globe. In fact, he notes that more than 67% of global economics have currencies with little value. Cryptocurrency may be able those countries, and keep them operational.
In short, we can’t find many arguments – technically or fundamentally – for significant downside on cryptocurrencies, like Bitcoin.
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