Bitcoin: USD/BTC (BTC=X) Ends Q1 Down 10%, Outperforming Equities in Coronavirus Crisis

Bitcoin: USD/BTC (BTC=X) Ends Q1 Down 10%, Outperforming Equities in Coronavirus Crisis

Bitcoin ended the first quarter of 2020 down from the start of the year, but not as badly as the record-setting losses suffered by global equities. 

On a 24-hour basis, bitcoin (BTC) was in the green less than a percent Tuesday afternoon Eastern time and ether (ETH) was up slightly as well. The performance of other cryptocurrencies was mixed. 

Notable assets on CoinDesk’s big board include decred (DCR) up 3 percent, XRP (XRP) in the green 2 percent and cardano (ADA) gaining 1 percent. Assets in the red included dash (DASH) slipping 1 percent and bitcoin SV (BSV) in the red 1 percent. All price changes are in the past 24 hours as of 20:30 UTC (4:30 p.m. ET) on March 31. 

In the traditional markets, Japan’s Nikkei 225 index closed down slightly, less than a percent. Europe’s FTSE 100 ended the day up 1.3 percent. In the U.S., the S&P 500 closed New York’s trading day down 1.6 percent. 

But for the full quarter, the Nikkei 225 was down 20 percent, the worst three-month showing for the Tokyo-based index since 2008. The FTSE lost 14 percent for the period, its second-worst quarterly performance ever, beating only the fourth quarter of 1987. The S&P 500 was in the red 18 percent to close out Q1 2020, its worst quarter since 1938. 

Cryptocurrencies operate 24/7 and don’t have quarters for closing the books. However, bitcoin, the market bellwether, was down just 10 percent for 2020’s first three months. 

The road ahead

While the coronavirus outbreak has dealt a heavy blow to the world economy, analysts are unsure how long it will take for growth to resume.

“Recessions typically unfold over a longer period of time – at least two consecutive quarters,” said Guy Hirsch, U.S. managing director of multi-asset platform eToro.

For the time being expect bitcoin’s role to keep switching for traders – it all depends on how other markets perform, experts say.

“The novel-tech part of bitcoin leads to correlation with Nasdaq, especially as many of the investors have overlaps,” said Arbol’s Jha. “Other times it will go with gold. But if equity markets are crashing, that correlation is going to show up very fast.” 

How the purchasing power of the U.S. dollar holds up given massive doses of stimulus from Washington is something else analysts are watching keenly. 

“The economic blow from the coronavirus pandemic has been instant and the impact is unprecedented,” added eToro’s Hirsch. “There is a growing consensus that due to the Fed announcing unlimited QE, investors could soon be looking to BTC as an inflation hedge against a depreciating dollar.“ 

Technical Indicators

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

The projected upper bound is: 7,605.73.

The projected lower bound is: 4,884.96.

The projected closing price is: 6,245.34.

Candlesticks

A black body occurred (because prices closed lower 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 17 white candles and 33 black candles for a net of 16 black candles.

Momentum Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 60.8840. This is not an overbought or oversold reading. The last signal was a buy 19 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 44.64. 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 13 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 6. This is not a topping or bottoming area. The last signal was a sell 5 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 11 period(s) ago.

Rex Takasugi – TD Profile

FOREX BTC= closed down -150.500 at 6,323.600. Volume was 82% above average (neutral) and Bollinger Bands were 12% narrower than normal.

Open     High      Low     Close     Volume___
6,475.5006,504.7006,248.5206,323.600 574,879
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 6,465.60 7,880.36 8,214.32
Volatility: 89 131 82
Volume: 673,866 462,415 187,642

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.

Summary

FOREX BTC= is currently 23.0% below its 200-period moving average and is in an downward 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 bearish on BTC= and have had this outlook for the last 40 periods.

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