Bitcoin: USD/BTC (BTC=X) Faces Drop Below $8,000
Bitcoin appears likely to drop below $8,000, despite having scaled a widely tracked technical resistance level.
The top cryptocurrency by market value is trading above the 20-day moving average for the first time since mid-September. The MA line was crossed multiple times over the weekend, but on each occasion the breakout was brief.
While some traders may anticipate a big move to the higher side, given the price has scaled the 20-day MA, the technical charts remain bearish. Further, prices are still holding well below the key 200-day MA, which has acted as strong resistance over the last 2.5 weeks.
BTC carved out a large bearish outside bar reversal candle on Friday (above left), signaling an end of the recovery rally and shifting risk in favor of a drop below $8,000. That candle is still valid with prices holding well below the high of $8,820 hit on Friday.
As mentioned, the cryptocurrency is trading well below the 200-day MA at $8,718 (above left). BTC has failed to close above the long-term average multiple times since Sept. 27, dampening prospects of a stronger recovery rally and making it the level to beat for the bulls.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
The projected upper bound is: 9,062.09.
The projected lower bound is: 7,478.88.
The projected closing price is: 8,270.48.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 19 white candles and 31 black candles for a net of 12 black candles.
A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
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 33.4390. This is not an overbought or oversold reading. The last signal was a sell 4 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 41.06. 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 8 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 13. This is not a topping or bottoming area. The last signal was a sell 3 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 10 period(s) ago.
Rex Takasugi – TD Profile
FOREX BTC= closed down -26.320 at 8,309.520. Volume was 97% below average (consolidating) and Bollinger Bands were 72% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 8,304.49 9,320.43 8,722.05
Volatility: 46 54 80
Volume: 80,770 80,623 85,790
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 4.7% 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 volume flowing into and out of BTC= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on BTC= and have had this outlook for the last 21 periods.