Bitcoin: USD/BTC (BTC=X) could breach descending channel to $9800 by next month
January 7 was a momentous day for Bitcoin, having finally crossed the $8000 level for the first time since late-November. With such a great start to 2020, Bitcoin could have more surprising upward price movements in store. BTC was valued at around $8100 at the time of writing, and indicators show the price could move further up in the coming weeks.
Bitcoin’s daily chart showed BTC in a descending channel formation since June last year, escorted by an overall decreasing volume trend since then. Channels tend to be continuation patterns, making an upward-facing breakout more likely in this scenario.
The 50-day moving average was seen moving under the price candles, supporting the concept of an upward movement in the short to medium-term. The price attempted to break above the 50% Fibonacci retracement line just days ago, and having failed, BTC price maintained its position above $7900.
The 200-day moving average, an indicator of long-term performance, looked bearish, and could be seen towering over the price candles, after having underwent a death cross in late-October.
However, the ‘hash ribbons’ indicator showed a ‘Buy’ signal at the time of writing, which has been in place since late-December. Including this time, the hash ribbons, invented by Charles Edwards of Capriole Investments, have only shown ‘Buy’ signals ten times in the history of Bitcoin. Also, following the indicator has managed to bring in average gains of over 5378%.
According to Edwards, since changes to difficulty can only occur every two weeks, difficulty lags the hashrate. So, the hash ribbons utilize this lag to predict miner capitulation, and potential buy-regions.
The difficulty was last adjusted on January 1, leaving only a few days till the difficulty recalibrate itself. Since Bitcoin touched a new all-time high hashrate last week, it is likely the difficulty will be adjusted upward in the coming days.
With BTC already moving above the Point of Control, Bitcoin could breakout upward from the pattern boundary, at least to the 61.8% Fibonacci retracement line at $9800, and potentially up to the 78.6% line at $11,600 within the next month.
If the price were to bounce down from the pattern boundary, BTC will likely find support at the 38.2% Fibonacci line, at around $7250, and further support at the channel mid-line. However, it seems unlikely, at this point, that Bitcoin will continue with such a move, and would likely rise back up to test the upper pattern boundary in the near future.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
The projected upper bound is: 8,628.15.
The projected lower bound is: 7,568.47.
The projected closing price is: 8,098.31.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white 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 63.0054. 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 64.07. 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 26 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 81. This is not a topping or bottoming area. The last signal was a sell 1 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 25 period(s) ago.
Rex Takasugi – TD Profile
FOREX BTC= closed down -17.910 at 8,077.810. Volume was 56% below average (consolidating) and Bollinger Bands were 3% wider than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 7,843.80 7,380.31 9,111.64
Volatility: 42 47 67
Volume: 103,318 92,243 86,325
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 11.3% below its 200-period moving average and is in an upward trend. Volatility is low as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into BTC= (mildly bullish). Our trend forecasting oscillators are currently bullish on BTC= and have had this outlook for the last 8 periods.