Bitcoin: USD/BTC (BTC=X) Hits $10,400 After Fed Chair Confirms Central Bank Working On Cryptocurrency
When it seemed like this week would put on the breaks on Bitcoin’s two-week rally and extend the profit-taking seen on Monday that dropped BTC back to $9,000 prices, the top crypto bounced back on Tuesday and re-entered $10,000.
Bulls surprised the market despite the fact that the chances of a pullback were heightened due to a cluster of bearish technical signals, including the TD Sequential “13” candle, a bearish engulfing pattern on the daily, a failure to close above $10,000 and the RSI crossing below the overbought level. Buyers coming back after a one-day break pushed prices to erase Monday’s red candle and affix it at $10,300 as of press time.
The market wondered what’s behind this surprise move and some point to Federal Reserve Chair Jerome Powell’s statement in front of the U.S. House Financial Services Committee. Powell, who withstood hours of questioning, was also asked by Rep. Bill Foster, a Democrat from Illinois, for his take on cryptocurrencies.
And, Powell’s carefully structured answer asserts the importance and the undiminished viability of the U.S. dollar in the financial system.
Nonetheless, he provided a general viewpoint for how the Fed could be digesting the emergent technology.
“Every major central bank is currently taking a deep look at that. We feel that’s our obligation, technology has now made that possible. I think it’s very much incumbent on us and other central banks to understand the costs and benefits and tradeoffs associated with a possible digital currency,” said Powell.
Powell also credited Facebook’s Libra for sparking the conversation about cryptocurrencies but cites several issues, including the possible knockback on a government-controlled ledger, which hinders the Fed from developing what in the crypto world calls us “Fedcoin.”
“Frankly, Libra really lit a fire,” Powell said, “and was a bit of a wakeup call that this is coming fast and could come in a way that is quite widespread and systemically important—fairly quickly if you use one of these big tech networks like Libra did.”
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 8,898.56.
The projected upper bound is: 11,086.01.
The projected lower bound is: 9,868.95.
The projected closing price is: 10,477.48.
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 34 white candles and 16 black candles for a net of 18 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 88.0241. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 2 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 73.28. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 3 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 137.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 11 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 15 period(s) ago.
Rex Takasugi – TD Profile
FOREX BTC= closed up 25.890 at 10,413.470. Volume was 37% below average (neutral) and Bollinger Bands were 45% wider than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 9,919.79 8,589.37 8,859.53
Volatility: 43 46 56
Volume: 204,764 125,405 93,900
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 17.5% above 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 39 periods. Our momentum oscillator is currently indicating that BTC= is currently in an overbought condition.
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