- The Bitcoin price continues to be in a narrow price range between 7,500 and 7,000 US dollars.
- If the historical “January effect” occurs, the BTC price could rise to over USD 8,000 in the first week of the new year.
The Bitcoin price has remained in a narrow price range over the last days of last year. Since the price bounced off the 7,700 USD mark on December 23rd, Bitcoin has been trading in a range between 7,500 and 7,000 USD. Some analysts interpret this as a lack of momentum to break through the $7,700 mark in such a way that another setback could follow in the $6,000 region.
However, a historical development suggests that the price of Bitcoin will increase in January 2020, with the price of Bitcoin always rising in the first week of January each year for the last three years, according to the trader SalsaTekila. In 2017 the BTC price increased 21.9% in January, 24.3% in 2018 and 11.8% last year. If this historical pattern is repeated, Bitcoin could climb to over $8,000 in the next seven days.
https://twitter.com/SalsaTekila/status/1211695710007156740
There is a logical explanation for this phenomenon, the “January effect”. In the financial markets, there is a hypothesis that there is a seasonal anomaly where the prices of securities and other assets rise more than in any other month. The most common explanation for this phenomenon is that income tax sensitive private investors, who hold disproportionately small stocks, sell their securities at year-end for tax reasons. With the start of the new year they invest again.
Another explanation is that many companies pay their employees a year-end bonus in January. According to theory, this is at least partly used to buy shares, which also drives up prices. According to the theory, smaller stocks (by market capital) are more affected than “large-cap” stocks.
Since Bitcoin and cryptocurrencies have a small market capitalization compared to the traditional financial market, the January effect could be particularly strong for Bitcoin (and Altcoins, such as XRP, which are even smaller by market capital). At least the historical trend is confirming this.
Bitcoin records longest wick in history
With the end of the year 2019, Bitcoin has also completed its annual candle from a chart technical point of view. As Twitter user TraderKoz noted, Bitcoin’s annual candle marked the longest wick in history. The candle, although green, shows a failed rally around mid-2019, to over 13,700 USD.
https://twitter.com/Holmes1991Jamie/status/1211746571634839552
Although chart analysis by Bitcoin is usually conducted on daily, weekly or monthly charts to better understand the market and the current trend, the annual candle does reflect the events and the trend very well. Nevertheless, the annual candle reflects the events and the trend very well.
On the one hand, the candle closed below 50% of the candle of 2017 suggesting that 2020 will remain bearish. On the other hand, experts argue that the candle will close green next year and fill the wick of 2019 with further price actions. A critical level to trigger a new bullish rally is seen by many technical analysts at $7,800.
As Josh Rager recently tweeted, BTC has to close above $7,800 to reverse the trend. Until then, the price continues to move in a sustained five-week accumulation range.
https://twitter.com/Josh_Rager/status/1211497734987042816
Follow us on Facebook and Twitter and don’t miss any hot news anymore! Do you like our price indices?
Recommended for you:
- Buy Bitcoin Guide
- Bitcoin Wallet Tutorial
- Check 24-hour Bitcoin Price
- More Bitcoin News
- What is Bitcoin?
Subscribe to our daily newsletter!
No spam, no lies, only insights. You can unsubscribe at any time.