Bitcoin: USD/BTC (BTC=X) may lack clear directional bias for the next few weeks
Bitcoin created a big bearish engulfing candle on Oct. 11, torpedoing the recovery rally and shifting risk in favor of a drop to lows below $7,800.
With the cryptocurrency trading well below $8,820 (Oct. 11 high), the bearish candle is still valid.
Also, prices remain trapped below the 200-day MA, which has consistently capped upside since Sept. 27. Notably, the cryptocurrency has struggled to gather upside traction in the last few days, despite the bullish divergence of the relative strength index – again a sign of bearish market conditions.
A bullish divergence occurs when the indicator charts higher lows, contradicting lower highs on price and is considered a strong trend reversal indicator.
BTC, therefore, risks revisiting recent lows near $7,750 in the short term. A violation there would imply a resumption of the sell-off from the September highs above $10,000 and open the doors for $7,200.
The bearish case would weaken if and when prices rise above the key MA, currently at $8,739.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
The projected upper bound is: 8,908.29.
The projected lower bound is: 7,322.66.
The projected closing price is: 8,115.48.
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 20 white candles and 30 black candles for a net of 10 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).
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 30.8064. This is not an overbought or oversold reading. The last signal was a sell 5 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 38.23. 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 9 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 -60. This is not a topping or bottoming area. The last signal was a sell 4 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 11 period(s) ago.
Rex Takasugi – TD Profile
FOREX BTC= closed down -12.400 at 8,155.200. Volume was 98% below average (consolidating) and Bollinger Bands were 73% 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: 8,315.36 9,277.87 8,741.74
Volatility: 45 55 80
Volume: 79,744 80,550 85,807
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 6.7% 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 22 periods.