Bitcoin began January buoyantly, showing optimistic signs of stability. However, the flagship cryptocurrency soon returned to its downward trend and BTC is currently valued at £2,615 ($3,413), as of 5.45pm, on February 4, 2019, according to CoinBase.com data. But evidence is now emerging to suggest the bitcoin sell-off is ending, fuelling bullish sentiment for BTC and the wider cryptocurrency industry.
Bitcoin is currently down more than 20 percent from the pre-Christmas 2018 highs above £3,218 ($4,200).
But Bitcoin has begun today to draw a falling wedge pattern on the daily chart.
A falling wedge is a bullish pattern that begins wide at the top and contracts as prices move lower.
The lower highs and lower lows created this year have converged on charts, creating this falling cone-shaped wedge.
The falling wedge is a bullish reversal pattern, meaning the BTC price will often break above the upper edge of the pattern and rally in value.
A breakout, if the current trend continues as hoped, should realise this eagerly-anticipated correction.
Breakouts are simply the price of the cryptocurrency as it emerges from a previous trading pattern.
In this instance, the new price “breaks out” above the high trading pattern lines that enclose all other prices for that security in the preceding period.
And breakouts are reliable indicators in predicting substantial positive movement.
Is bitcoin actually in line for a seven-month consecutive decline?
Despite the nascent signs for optimism for bitcoin, and the cryptocurrency industry as a whole, the overall trend remains particularly parlous.
Bitcoin is still edging ever-closer to establishing its longest-running bear market.
Alex Kruger, a cryptocurrency economist, has described today how the first time bitcoin had entered such a downward trajectory of selling sentiment in its 10-year history.
Mr Kruger wrote: “Bitcoin has never before traded more than six months in the same direction.
“A down February would represent seven straight red months. Would be a first.”
In December 2017, the value of bitcoin per piece was close to £15,326 ($20,000).
Yet by January last year, bitcoin was closer to £2,643.74 ($3,450).
This represents an approximate 82 percent drop in value in only 13 months.
Market analyst Mati Greenspan of eToro said: “When thinking about cryptoassets at the moment it seems a different animal comes to mind as bitcoin has now officially logged its longest bear market in the asset’s relatively short history.
“From December 2017 until today bitcoin has dropped a total of 82 percent from peak to trough, making a total stretch of 413 days without any indication of a turnaround.
“It should be noted though that even though this is the longest stretch, it’s not the deepest.
“The five-month bear of 2011 saw a drawdown of 93 percent and the crypto winter from the end of 2013 to the beginning of 2015 saw a total drawdown of 86 percent.”