Bitcoin: USD/BTC (BTC=X) Falls Back After Briefly Breaking $9k Resistance
- Bitcoin has all but erased the day’s gains after pushing past the $9,000 resistance level this morning.
- A significant move back above $9,000 could trigger liquidations and a possible short squeeze across the market.
- Other cryptocurrencies continue to recoup losses from late 2019.
Bitcoin’s bulls have failed to make a solid move above $9,000, having briefly topped the level earlier on Friday.
After an indecisive Thursday, prices started their rise during the Asian trading day. Based on CoinDesk’s Bitcoin Price Index, the top cryptocurrency by market cap moved from just under $8,700 at 01:00 UTC to $9,009 around 10:00 UTC – the third attempt to break through this morning.
$9,000 would be a test as it is seen as a key resistance level, both from a technical and psychological point of view,” wrote Simon Peters, eToro analyst and crypto expert, in a note Friday. “Such an increase would also see the price challenge the current 200-day moving average, a strong indication that bitcoin is entering into bullish territory.”
He added: “However, there is always the risk of retracement if the community thinks bitcoin is overbought.”
The recent rally has not just bitcoin-only movement. Most other cryptocurrencies have also experienced strong gains in the past 24 hours. Coins in the top 10, including ether, XRP and Binance coin, are also coming close to two-month highs.
There are also some outliers. Following the launch of Binance futures Thursday, ethereum classic is now trading at just below $10, the highest since October 2018.
This strong surge in alternative cryptocurrencies has had a slight effect on the broader dynamics of the asset class. Bitcoin dominance – the coin’s share of the total cryptocurrency market – has dropped from nearly 2 percent since last Friday.
Bitcoin currently makes up approximately 66 percent of the total market, according to CoinMarketCap. Declining dominance suggests traders are placing proportionally less value into bitcoin, attracted to the possibility of making better returns from bets outside of the original cryptocurrency.
Should the bulls be able to push bitcoin firmly back above the $9,000 threshold, the market may face a short squeeze – a sharp rise in a particular asset’s price following a series of mass liquidations.
There’s some precedent for this. In the space of a few days at the beginning of April last year, bitcoin increased by more than $1,000 after finally moving past the long-fought-over $4,200 resistance line.
Data collected by crypto analytics site Skew show that the April move caused more than $500 million worth of short liquidations on BitMEX (see chart below). According to CoinGecko, BitMEX’s BTC/USD derivatives volumes have increased over the past seven days. Daily volumes were approaching $3.5 billion at press time, more than a billion dollars higher than last Friday.
Helped along by the hype surrounding Facebook’s Libra coin, the April move triggered a bull run that ultimately took bitcoin up to $13,000 by the end of June 2019. Looking at prices today, it’s possible that should a short squeeze happen soon, the stars could align for a second time.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 8,090.76.
The projected upper bound is: 9,284.27.
The projected lower bound is: 8,169.28.
The projected closing price is: 8,726.77.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 9 white candles and 1 black candles for a net of 8 white candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.
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 80.4367. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 10 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 66.65. This is not a topping or bottoming area. However, the RSI just crossed below 70 from a topping formation. This is a bearish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 0 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 68. This is not a topping or bottoming area. The last signal was a sell 0 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 31 period(s) ago.
Rex Takasugi – TD Profile
FOREX BTC= closed down -201.351 at 8,703.600. Volume was 88% below average (consolidating) and Bollinger Bands were 59% wider than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 8,507.57 7,540.78 9,033.73
Volatility: 48 47 63
Volume: 107,621 95,006 86,545
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 3.7% below its 200-period moving average and is in an upward trend. Volatility is Our volume indicators reflect very strong flows of volume into BTC= (bullish). Our trend forecasting oscillators are currently bullish on BTC= and have had this outlook for the last 14 periods.
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