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Bitcoin [BTC] Price Analysis: Bitcoin may Fall to $8,500, is Reddit a new source of Trading Signals?

Bitcoin is known for wild swings and retail traders. Commentators say that the lack or the presence of strong regulations is a big blow for institutional grade investors like pension funds, who aware that Bitcoin prices and crypto in general is full of potential and could rake in high dividends, is susceptible to price manipulation considering its decentralized nature.

The Role of Regulators in Bitcoin’s Success

However, the approval of Bitcoin and crypto centric products depends on regulators. Most have shown their willingness to embrace the underlying tech, and are generally open-minded. Chief amongst them is the US SEC.

The Jay Clayton-led regulator is cautious and with comments from the US President and recently, the US Secretary of Treasury, Steven Mnuchin, a Bitcoin ETF is unlikely to be approved this year.

Nonetheless, that won’t stop investors and traders from using unconventional means of determining possible price trends.

Trading Signals from Reddit?

Recently, a finding from ChartStar, as reported by CoinDesk, revealed that there is a direct correlation between BTC price and “Bulls” search term in the popular social media platform Reddit.

Their study found that Bitcoin prices rise in tandem when the number of “Bulls” search term increase, correcting only when the number of this search term overshoots. Commenting on this, David Gilbert of ChartStar said:

“There is a surge in optimism outpacing the trend, followed by a fall in price. This could indicate that excess optimism is a sign of the asset being overbought and is a potential warning a correction is due.”

BTC/USD Price Analysis

Bitcoin BTC price chart FEBRUARY 22

Week-to-date, BTC prices are firm above the middle BB but down 7%. In the last day, prices remain neutral. Still, the trend remains firmly on the upside. From the daily chart, bears have failed to build on Feb 19 strong bear candlestick.

The fact that prices are also trending above the support, previous resistance level of $9,500, is a hint of buyers. Notably, it means the retest is complete more so if prices continue edging higher, building on yesterday’s bull bar.

Ideally, aggressive traders can load the dips as the trend is firm. However, judging from candlestick arrangement, the best course of action is to wait for higher highs above $10,000.

After that, and more so if the rebound is at the back of high trading volumes, traders can buy the dips and aim for June 2019 highs of $13,800.

For now, patience is paramount. Prices are trending inside Feb 19 bear candlestick with light volumes. Any drop below $9,500 could trigger more price dumps as BTC free fall back to $8,500.

Chart courtesy of Trading View-Coinbase

Disclaimer: Views and opinions expressed are those of the author and is not investment advice. Trading of any form involves risk. Do your research.

Dalmas Ngetich
Dalmas Ngetich
Dalmas is a very active cryptocurrency content creator and a highly regarded technical analyst. He has worked in various media as an analyst. He is passionate about blockchain technology, the futuristic potential of cryptocurrencies and enjoys the opportunity to help educate bitcoin enthusiasts through writing about his knowledge and analysis of coin price charts.
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