Bitcoin: USD/BTC (BTC=X) Price hit by dramatic value fluctuations amid coronavirus panic buying and selling
Bitcoin has experienced wild price swings in recent days as cryptocurrency markets respond to the global economic uncertainty sparked by the coronavirus epidemic.
The cryptocurrency has swung between highs of $9,000 and lows of 4,000 since the start of March, representing the most severe price volatility since the market explosion and subsequent crash in late 2017.
Over the last week the value of one bitcoin has risen by more than $1,000 to its current price of $6,600.
The latest price rise came after the US Federal Reserve announced unlimited quantitative easing measures to help reduce the economic impact of coronavirus.
This follows similar announcements from other central banks like the Reserve Bank of Australia and the European Central Bank to artificially increase the money supply.
Such drastic economic policy is seen by some analysts as a potential opportunity for investors, who may consider bitcoin as a safe-haven asset due to its decentralised nature.
The limited supply of bitcoin – only 21 million will ever exist – means it is also immune to quantitative easing and other emergency monetary measures that fiat currencies are susceptible to.
“The US Federal Reserve’s announcement effectively pumps billions of dollars into the market, so some investors may be weary that the dollar will lose its value, and are moving back into bitcoin to hedge against inflation,” Simon Peters, a cryptocurrency analyst at the online trading platform eToro, told The Independent.
“Because the amount of new bitcoin that comes on to the market decreases over time, it is by design a deflationary asset when compared with a fiat currency like the US dollar. In theory the value per bitcoin should increase over time.”
Other major cryptocurrencies continue to experience similar fluctuations, though the full extent of the impact the coronavirus outbreak has had on markets is yet to be fully realised.
Bitcoin was launched in 2009 in response to the financial crisis of the previous year, offering a revolutionary alternative to the traditional financial system.
The electronic cash system has failed to achieve mainstream adoption in the subsequent years, during which the global economy recovered and achieved sustained growth. Some experts believe that the advent of another economic collapse could be see a renewed interest in bitcoin as an alternative form of currency and store of value.
“This is the first time the world has faced a financial crisis when there has been an alternative financial system,” said Marcus Swanepoel, CEO of London-based cryptocurrency exchange Luno.
“Cryptocurrencies are still very young, and at this stage in their development cannot replace fiat currencies, but as the problems global markets face increase we will see investors looking at digital assets as a way of distancing themselves from digital investments.”
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 7,546.91.
The projected upper bound is: 7,924.77.
The projected lower bound is: 5,233.37.
The projected closing price is: 6,579.07.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 20 white candles and 30 black candles for a net of 10 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 76.1304. This is not an overbought or oversold reading. The last signal was a buy 13 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 46.18. 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 7 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 101.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 9 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 44.380 at 6,640.000. Volume was 9% below average (neutral) and Bollinger Bands were 96% wider 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: 6,181.39 8,306.95 8,329.70
Volatility: 124 128 81
Volume: 543,354 392,699 166,198
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 20.3% below its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. 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 34 periods.