Optimism grows as traders get comfortable with the cryptocurrency market’s current bull cycle. Some of the industry’s most influential figures predict that $500,000 Bitcoin is on the horizon, but indicators tell a different story.
Bitcoin Prepares for Explosive Volatility
The flagship cryptocurrency has left traders scratching their heads, defying even the most well-researched predictions. Bitcoin has mostly been contained between the $11,200 support and the $12,140 resistance level and has yet to clearly signal its next move. Even though it reached a new yearly high of $12,500 on August 17, BTC was still unable to break out of this consolidation range.
The prolonged stagnation phase that BTC has gone through is forcing the Bollinger bands to squeeze on the daily chart, indicating that a period of high volatility is forthcoming. A daily candlestick close below $11,200 or above $12,140 will determine the direction of Bitcoin’s likely explosive breakout.
Slicing through the overhead resistance would likely be followed by a spike in buy orders. Such a spike could give Bitcoin the momentum it needs to resume its uptrend. If this were to happen, BTC could advance towards mid-June’s high of $13,870. But if sell orders begin to pile up, the pioneer cryptocurrency might break below the $11,200 support level—turning this area into resistance could cause BTC to drop to the next significant level of support around $10,050.
Due to the ambiguous outlook, the area between the $11,200 support and the $12,140 resistance is a reasonable no-trade zone. Regardless of the risks, some of the most prominent industry figures remain bullish.
Market Participants Grow Optimistic
The Winklevoss twins, for instance, recently published an article where they make a case for Bitcoin prices reaching $500,000. Cameron and Tyler Winklevoss argue that BTC possesses the same characteristics that make gold so valuable.
The founders of American-based cryptocurrency exchange Gemini maintains that the bellwether cryptocurrency is the only known commodity with a “deterministic and fixed supply.” Based on this attribute, Cameron and Tyler believe that Bitcoin is a superior asset to gold “by an order of magnitude.”
“Bitcoin has already made significant ground on gold—going from whitepaper to over $200 billion in market capitalization in under a decade. Today, the market capitalization of above ground gold is conservatively $9 trillion. If we are right about using a gold framework to value bitcoin, and bitcoin continues on this path, then the bull case scenario for bitcoin is that it is undervalued by a multiple of 45. Said differently, the price of bitcoin could appreciate 45x from where it is today, which means we could see a price of $500,000 U.S. dollars per bitcoin,” said the Winklevoss twins.
Adding to the astronomic price prediction that the Winklevoss twins have made, a sense of optimism can be seen across the entire crypto market. Data from blockchain data analytics firm Glassnode suggests that Bitcoin prices have migrated from “Hope” to “Optimism” and may soon enter the “Belief” stage. Based on the difference between relative unrealized profits and losses, this technical index suggests that BTC has a long way to go up before it enters the last stage of the market cycle, dubbed “Euphoria.”
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
The projected upper bound is: 12,611.32.
The projected lower bound is: 10,901.69.
The projected closing price is: 11,756.50.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 35 white candles and 15 black candles for a net of 20 white 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.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
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 83.0183. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 7 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 55.19. 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 25 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 34. This is not a topping or bottoming area. The last signal was a buy 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 sell 23 period(s) ago.
Rex Takasugi – TD Profile
FOREX BTC= closed up 26.800 at 11,707.270. Volume was 56% below average (consolidating) and Bollinger Bands were 26% narrower than normal.
Open High Low Close Volume 11,676.250 11,748.000 11,515.980 11,707.270 274,255
Technical Outlook Short Term: Neutral Intermediate Term: Bearish Long Term: Bullish
Moving Averages: 10-period 50-period 200-period Close: 11,537.07 10,993.17 9,067.61 Volatility: 35 49 83 Volume: 511,812 728,908 536,982
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 29.1% above 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 7 periods.
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