Buy the rumor, sell the news?
Baked Warehouse Storage opened yesterday, when clients could deposit Bitcoin funds into their accounts. However, minutes after the tweet announcing the opening, Bitcoin's price dropped by $ 700 – a classic example of buying the rumor, selling the news.
Let's take a look at the listings to see where the market stands.
Bitcoin price trend
twittered their opening, the price dropped from $ 10,900 to $ 10,200.
A classic example of the concept of "Buy the rumor, sell the news" where traders and investors buy an asset that expects a positive result from a certain event in the future.
the original levels.
During 2017, this was a widespread phenomenon wi th altcoins announce, causing the coin to rise. Another great example is the halving of Bitcoin and Litecoin. Previously, prices rose before the event while dropping after (or slightly before) the event took place.
General overview Bitcoin
[19659005] BTC / USD Weekly chart. Source: Tradingview
Checking the general overview provides a perspective on accumulation after the first break upwards. In the 2016 scenario, there is also the period of lateral movements, while the 21-week EMA began to take off again.
In the current scenario, the market is still waiting for confirmation of the bull market before it is able to develop upwards.
Not only is the 21-week EMA significant support according to the previous beef market, but some basic factors (eg record hashrate) will also play.
In May 2020, halving will occur, which in total will have a bullish effect on the market.
In the near-term, the launch of Baked Bitcoin futures platform – the first with the physically de livery of Bitcoin – September 23 can have a beneficial effect on the market, as well as positive news related to a Bitcoin ETF, should have a bullish effect on the market in general. ] "/>
Total crypto market excluding Bitcoin. Source: Tradingview
However, on the more interesting note, altcoin / BTC pairs began to bounce a bit during the recent downturn of Bitcoin and total market capital except BTC is still around the previous resistance.
During the previous Bitcoin dropdowns, it was normal to see altcoins move slightly more than Bitcoin when correlated, however, it looks like the tide is turning. [19659002] When we go back to the previous cycle (which started in January 2016), we can also see some similarities here.
Total crypto market excluding Bitcoin (2016). Source: Tradingview [19659002] In 2015, there was also a fine flow of this market capital, but mainly caused by Bitcoin going up (corresponding to the previous run of the Bitcoin price towards $ 14,000).
edged a heavy draw to try at the previous resistance levels to support, breaking 21EMA and running upwards.
Like the market, a confirmed retest of the old resistance area is now in support. Crucial to that is a bounce in altcoin / BTC pairs, where the total market for altcoin remains flat under the drops of Bitcoin.
The same retesting and levels can be seen in the Ether (ETH) chart, which is a key indicator of the altcoin market. It is difficult to expect ERC-20 symbols to move upwards, while Ether is still down.
ETH / USD Source: Tradingview
The chart is still in a falling wedge and is at an important support level, and if Ether manages to hold above $ 155 and turn that support level, a strong divide is expected with a potential target of $ 370.
During this period, Bitcoin should remain flat / weak trend upward to give altcoins space and capture, however, as ETH / USD begins to move, other ERC-20 symbols may follow. [19659003] Bitcoin market capital dominance
BTC / USD bullish scenario. Source: Tradingview
In a bullish scenario, the Bitcoin price must maintain the support range around $ 10-10-10 and clearly break through the significant resistance and downturn.
If the prize manages to do so and return $ 10,800-1,000 as support, the $ 14,000 highlights are back in play. However, after such a harsh rejection, it is not expected to see such a riot again.
If Bitcoin decides to push upward through this bullish scenario, it won't be a surprise to see altcoins begin to fall back as the market shifts its focus entirely to Bitcoin. In this case, the dominance will move up to 75-80%.
Bearish scenario
BTC / USD bearish scenario. Source: Tradingview
In a bearish scenario, the price cannot break above $ 10,600 and cannot contain the $ 10,100-10,200 range as support. This will make room for the $ 9,200 support area, which also completes the descending triangle pattern.
Given the support level below us (where the 21-week EMA is the most important), however, it is not to be expected that we will return fully to $ 6,000 if we are bullish.
As mentioned earlier, it is healthy to see a period of accumulation on a new floor.
In that sense, a scenario with a small fall toward $ 9,000 would provide a test of the 21-week EMA and would also take the liquidity under the $ 9,300 support. This is the most important support, so normally many stop / loss levels are below this zone.
From that perspective, the market still looks very healthy and is accumulating here. If the market actually copies the 2016 performances, a test of the 21-week EMA was enough to confirm the bull market and altcoins to start moving.
Will history repeat itself?
The views and opinions expressed here are solely the views of the author and do not necessarily reflect Cointelegraph's views. All investments and trade movements involve risk. You should conduct your own investigation when making a decision.
