3 Reasons Why This Is the Bottom of the Bear Market

14 Aug 2018 -Jon Cotton, Chief Strategist at BCB Group, a leading global cryptocurrency prime brokerage, provides three reasons for his view that the bear market in Bitcoin and other cryptocurrencies is likely to be at an end, and we can look forward to gradually increasing prices from here.

Although cryptocurrencies are still technically in a clear bear market, as witnessed by their positions relative to all of the major moving averages, there are several clues telling us the market may have bottomed here (BTC: $5900, ETH $250).

1) Many of the larger altcoins including Ripple XRP, Litecoin and Etherium have retraced the entirety of autumn's parabolic blow-off top, reaching price levels where there was multi-month consolidation earlier in 2017; these levels will be strong support. Essentially the late 2017 bubble has now entirely been reset.

2) For the first time, altcoins are making lower lows while BTC, usually the sentiment leader, is not. This suggests divergence within the market; the sentiment leader is heading off in a new direction and the small, more volatile assets have yet to notice. The altcoins are also all heavily oversold on daily RSI (relative strength index). Together this combination leads me to suspect we may see a powerful elastic-band rebound shortly, as altcoins correct upwards to catch up with BTC.

3) Bitcoin itself has finally reached a very long-term logarithmic uptrend channel which dates back to 2012. BTC is exactly at the top of that channel currently, and we are expecting price to stay within its confines from here-on, naturally implying an uptrend. The lower edge of the channel is around $4800 currently, so a spike lower short-term would still be consistent with this channel, however the altcoin divergence mentioned above implies we are more likely to see a sideways or upwards trending price movement into the channel from here.

The bull market won't have formally resumed until the 50 day moving average is back above the 200 day, however we now think this is just a matter of time and repeat our recent prediction of BTC $19,000-$29,000 in January 2020.

About BCB Group

BCB Group is a cryptocurrency prime broker, a service specifically designed to cater to the needs of institutional clients who need OTC best execution for their own accounts and who wish to offer cryptocurrency products and services to their own clients. BCB Group's service allows traditional brokers, hedge funds, crypto funds, wealth managers and private banks to extend their capabilities in the cryptocurrency market with turn-key solutions for onboarding, execution, settlement, reporting and custodianship. Shadowing regulatory requirements for analogous businesses in traditional financial services, BCB Group ensures full coverage governance and reporting, a complete KYC and AML policy, and appropriate risk and liquidity management, alongside maintaining ongoing dialogue with regulators and relationships with reputable liquidity providers. BCB Group pledges to give 1% of net annual profits to charity.


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