Bitcoin: USD/BTC (BTC=X) are abuzz over new data showing more people might be tiptoeing into the market
Mass adoption has long been one of the main bullish investment theses for bitcoin. The bet is growing numbers of institutions and individuals will eventually come to understand the cryptocurrency’s virtues, from its potential use as a peer-to-peer payment system to its potential as a hedge against inflation, like a digital version of gold. As the newbies pile in, prices will soar, the theory goes.
Shayne Heffernan Trade Idea
“The frequency of deposits in the amount of $1,200 had jumped – a hint some recipients of coronavirus relief checks from the U.S. government might even be using the funds to buy cryptocurrencies.”
The unprecedented money injections by the Federal Reserve and other central banks have “pushed many people toward speculation in bitcoin as an alternative monetary system, they may pay heavily for that in the future, sell the post halving rally” Shayne Heffernan PhD in Economics
Why This Matters
The recent correlation since the beginning of 2020 is something that can’t be ignored. However, neither is the last two months of 2019 where Bitcoin slumped during a period of strong economic growth.
Bitcoin appears on track to test the psychological hurdle of $8,000, having found acceptance above key hurdle last week.
“$8,000 test is getting more likely now,” tweeted popular trader @CryptoCapo_. The bullish view could be attributed with a recent breakout on the weekly chart.
The cryptocurrency closed last week (UTC) above the horizontal 100-week average resistance, which had consistently capped upside in the preceding four weeks. The breakout, coupled with a bullish higher-lows and higher-highs setup on the daily chart, suggest scope for an extension of the ongoing rally from the March low of $3,856.
Exchange activity, too, supports further gains in the short term. For instance, the seven-day moving average of bitcoin balances on cryptocurrency exchanges has declined 2,398,881 on Sunday, according to Glassnode data, likely signaling a shift to holding strategies. Investors usually withdraw coins from the exchanges to hold in their personal wallets when prices are expected to rise.
While the path of least resistance appears to be on the higher side, the possibility of a sudden move lower cannot be ruled out. Some observers believe selling pressure from miners is currently high and could increase further in the coming months as the top cryptocurrency is set to undergo its mining reward halving, a 50 percent reduction in block rewards, next month.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 8,189.89.
The projected lower bound is: 5,512.27.
The projected closing price is: 6,851.08.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 21 white candles and 29 black candles for a net of 8 black candles.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 54.7392. This is not an overbought or oversold reading. The last signal was a sell 1 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 49.13. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 33 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -62. This is not a topping or bottoming area. The last signal was a sell 11 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 5 period(s) ago.
Rex Takasugi – TD Profile
FOREX BTC= closed up 27.450 at 6,892.100. Volume was 75% below average (consolidating) and Bollinger Bands were 67% narrower than normal.
Open High Low Close Volume 6,862.000 6,936.510 6,806.100 6,892.100 106,902
Technical Outlook Short Term: Neutral Intermediate Term: Bullish Long Term: Bearish
Moving Averages: 10-period 50-period 200-period Close: 6,980.96 6,870.63 8,002.32 Volatility: 56 133 82 Volume: 323,226 576,558 240,183
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
FOREX BTC= is currently 13.9% below its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect moderate flows of volume into BTC= (mildly bullish). Our trend forecasting oscillators are currently bullish on BTC= and have had this outlook for the last 19 periods.
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