Will Bitcoin’s Price Extend Its Four-Year January Losing Streak?


0

Bitcoin (BTC) has reported losses in January for the last four years, and a fifth now looks on the cards.

The leading cryptocurrency by market value fell 32 percent, 14.6 percent, 0.10 percent and 26.64 percent in the first month of 2015, 2016, 2017 and 2018, respectively, according to CoinDesk’s Bitcoin Price Index.

Notably, the odds are stacked in favor of BTC extending the four-year January losing streak this year.

BTC fell 13 percent last week, signaling an end of the corrective bounce from the December low of $3,122. The sell-off reinforced the bearish view put forward by the downward sloping 10-week simple moving average. As a result, a drop to $3,122 in the next couple of weeks cannot be ruled out.

That said, the probability of BTC beating the trend this month would rise if the former support-turned-resistance of the 21-day moving average (MA), currently at $3,768, is convincingly scaled in the next few days.  A breach there would strengthen the short-term bullish case.

As seen above, BTC’s 32 percent drop in January 2015 marked an end of the four-year January winning streak. As of writing, BTC is changing hands at $3,611 – down 2 percent from the monthly opening price of $3,689.

3-day chart

As seen above, BTC failed to cut through the 21-candle MA earlier this month, strengthening the bearish view put forward by the downward sloping line.

Further, the drop to $3,476 (Jan. 13 low) invalidated the bullish trend change signaled by the outside reversal candle of Dec 20.

So, it could be argued that the path of least resistance is to the downside.

Daily chart

The 21-candle MA on the daily chart acted as strong support on multiple occasions before it was breached on Jan. 10.

Therefore, bearish pressures would weaken somewhat if prices cross the 21-candle MA, currently at $3,768, in the next day or two. That would boost the prospects of BTC closing above the monthly opening price of $3,689 on Jan. 31.

View

  • The probability of BTC extending the four-year January losing streak is quite high.
  • BTC risks falling to $3,122 in the near-term, having validated the bearish 10-week MA with a 13 percent drop last week.
  • BTC may snap the four-year January losing streak if prices weaken the immediate bearish pressures with a move above the 21-day SMA in the next couple of days.

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

Bitcoin image via Shutterstock; price charts by Trading View


Like it? Share with your friends!

0

What's Your Reaction?

hate hate
0
hate
confused confused
0
confused
fail fail
0
fail
fun fun
0
fun
geeky geeky
0
geeky
love love
0
love
lol lol
0
lol
omg omg
0
omg
win win
0
win
coindesk

Choose A Format
Story
Formatted Text with Embeds and Visuals
Video
Youtube, Vimeo or Vine Embeds
List
The Classic Internet Listicles
Open List
Submit your own item and vote up for the best submission
Countdown
The Classic Internet Countdowns
Poll
Voting to make decisions or determine opinions
Ranked List
Upvote or downvote to decide the best list item
Personality quiz
Series of questions that intends to reveal something about the personality
Trivia quiz
Series of questions with right and wrong answers that intends to check knowledge
Meme
Upload your own images to make custom memes
Audio
Soundcloud or Mixcloud Embeds
Image
Photo or GIF
Gif
GIF format