Bitcoin prices shrunk sharply over the last 48 hours from £4,877 ($6,278) to £4,333 ($5,5577) between 9.00am GMT on November 24 and 2.40pm GMT on November 26, according to CoinDesk.com. The flagship cryptocurrency began trading of £4,030 ($5,188) on Thursday, before closing largely unchanged on the day (as per UTC) at £4,335 ($5,580). This price swing is known as a long-tailed doji candle – a trading pattern with virtually identical opening and closing prices.
The “candlestick” signals indecision about the future direction of the underlying security.
Because the “candle” appeared at the bottom of the price free-fall, the indecision has been interpreted as predominantly being among jittery sellers.
This is thought to be a sign of bearish exhaustion.
Bitcoin has witnessed similar corrective rallies in the days following similar long-tailed candles in 2018.
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The Bitcoin price formed a long-tailed candle on February 6 and rallied to highs of £9,093 ($11,700) in the preceding fortnight.
And a long-tailed candle on April 5 was preceded by a rally to highs of £7,694 ($9,900).
This pattern was again repeated in both June and August.
This has led analysts to believe to a recovery rally could be imminent.
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A true test would be a return top price north of of $4,662 ($6,000), a long-term bottom price achieved in recent months.
However, a break below that level could signal a resumption of the fire sale.
Bitcoin was dealt another blow from Benoit Coeure, a European Central Bank Executive Board member, who yesterday described bitcoin as ”a combination of a bubble, a Ponzi scheme, and an environmental disaster.”
Mr Coeure’s comments reflect bitcoin’s relatively price spike, which saw BTC’s soar from less than £777 ($1,000) at the beginning of 2017, to almost £15,543 ($20,000) by the end of the year.
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Despite 2018’s turbulence, prices remain far above where they were before 2017’s bull run.
Mr Coeure added: ”Bitcoin was an extremely clever idea. Sadly, not every clever idea is a good idea.
“Few remember that Satoshi embedded the genesis block with a Times headline from January 2009 about U.K. banks’ bailout.
“In more ways than one, bitcoin is the evil spawn of the financial crisis.”
Bitcoin was created by the mysterious Satoshi Nakamoto 10 years ago towards the end of 2008.