A Deeper Correction Is Expected For Bitcoin

The price of Bitcoin has been caught in the $7,500 to $8,100 range over the past six days.  The struggle for price direction is very clearly evident.  A deeper correction is expected for Bitcoin.  The downside has been oscillating in the ranges of $7,500. The immediate outlook about the Bitcoin price is neutral due to the range bound nature of the price correction.

If the bulls should come back in the commanding position, there needs to be a convincing break above the upper edge in the range.

The 4-hour chart shows that the Bitcoin is in the falling channel.  The 50-Candle Moving Average is also trending south.  This has produced a bearish crossover on the 100 Moving Average Candle.  The 50-Candle moving average is set to cross below the 200 candle in the moving average.  There is, therefore, a high risk for BTC falling back to the lower end of the recent trading range in the $7,500 through $8,100 range.

The bullish exhaustion has been validated when the past week’s candle has been closed below $8,000.  BTC is flashing green this week.

People use different classifications for Bitcoin, and therefore, when the question of taxes arises, there is a lot of confusion. If Bitcoin is classed as a cryptocurrency then it will be taxed like currency if it were called “digital gold” it will be taxed at par with gold, and if it is classified as a commodity, it will be taxed like oil.

However, the clarification from the IRS states that Bitcoin will be taxed like a property, which means it will be treated as stock. Short-term capital gains apply to those who hold Bitcoin for more than a year.

Bitcoin by itself is not bullish.  One the analyst stated, “The trend is bearish” in his tweet.  He further added, “Any trend, regardless of the bias, has to retrace and confirm the direction.”

A possibility of retracing back to $6,000 is considered to be an absolute possibility.  Another analyst stated that the last long-term uptrend of BTC touched the 100-day EMA seven times.

It is expected by several analysts for the Bitcoin to gradually go down to the $5,000 through $6,000 in the forthcoming months.  This will stand to the standards of the 10-year logarithmic growth curve. No matter what there is no conclusive trendsetting. Several institutions are opening, and exchanges and the infrastructure for the next dominant Bull Run are ready though.

Marjory Lewis

Marjory is a science graduate with interest in new technological innovations. She has been attracted to blockchain from the very beginning and covers bitcoin and blockchain news for Bitcoin Journal.

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