Bitcoin: USD/BTC (BTC=X) consolidation may end up with bullish breakout
Bitcoin’s latest bout of consolidation may end up with bullish breakout, as a key metric of miner confidence has hit all-time highs.
The top cryptocurrency by market value has clocked lower daily highs and higher daily lows over the last three days and is currently trading at $10,300 on Bitstamp, little changed on a 24-hour basis.
The cryptocurrency has charted the narrowing price range amid a surge in non-price metrics including a rise in the network’s hash rate – a measure of the computing power dedicated to mining bitcoin.
Notably, the two-week average hash rate reached a record high of 85 exahashes per second (EH/s) around 19:00 UTC on Friday. Further, mining difficulty – a measure of how hard it is to create a block of transactions – also jumped to a new all-time high of nearly 12 trillion.
Hash rate can be considered a barometer of miners’ confidence in the bitcoin price rally. After all, they are more likely to dedicate more resources to the computer intensive process that secures the network and processes transactions if they are bullish on price. Miners would likely scale back operations if a price slide is expected.
Hence, many observers, including the likes of Changpeng Zhao, CEO of Binance, and former Wall Street trader and journalist Max Keiser believe prices follow hash rate.
It is worth noting, though, that the market is divided on the relationship between price and hash rate.
Some observers believe the hash rate follows price and the metric’s stellar performance represents overtly exuberant miners.
That said, the price is likely to follow the hash rate this time, as over-exuberance is typically observed at market tops or near record highs. As of now, BTC is down almost $10,000 from the record high of $20,000 reached in December 2017.
Further, with the next reward halving (supply cut) due in less than a year, market sentiment is quite bullish. The sustained uptick in miners’ confidence is more likely to draw fresh bids, possibly leading to a positive feedback loop.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 11,178.83.
The projected lower bound is: 9,363.61.
The projected closing price is: 10,271.22.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white 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 64.3457. This is not an overbought or oversold reading. The last signal was a buy 6 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 49.27. 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 sell 82 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 -41. 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 14 period(s) ago.
Rex Takasugi – TD Profile
FOREX BTC= closed up 46.250 at 10,256.000. Volume was 72% below average (consolidating) and Bollinger Bands were 51% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 10,260.09 10,473.58 8,064.42
Volatility: 27 55 78
Volume: 72,124 82,768 82,663
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 27.2% above 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 volume flowing into and out of BTC= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on BTC= and have had this outlook for the last 2 periods.