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Bitcoin: USD/BTC (BTC=X) January Surge Rekindles Memories of Crypto Bubble

Bitcoin: USD/BTC (BTC=X) January Surge Rekindles Memories of Crypto Bubble

Bitcoin is off to its best start to a year since 2012, gaining about 20% in two weeks amid a renewed enthusiasm that is reviving memories of the mania of a few years ago.

The world’s largest virtual coin rallied after climbing out of the downward price channel it’s been trading in for weeks, rising as much as 8.9% to $8,854, the highest since November. So-called altcoins were doing even better, with Dash and Bitcoin SV more than doubling and Bitcoin Cash up 60%.

“When Bitcoin goes up, our customers usually start buying altcoins as they tend to follow the leader,” said Steve Ehrlich, chief executive officer of crypto-asset broker Voyager Digital.

As was the case during the 1,400% surge that took place in 2017 that pushed Bitcoin into the mainstream, multiple reasons are being cited for the optimism. The move upward coincides with the debut of new options linked to the digital currency.

The latest rally appears to be a breakout following an extended downturn going back to August. Gains will remain volatile unless Bitcoin is able to breach the $9,500 level, “which would indicate a higher high for the first time,” Ayyar said.

Bitcoin’s almost 20% gain in the first two weeks of the year followed a volatile 2019, in which early optimism from investors over the announcement of Facebook Inc.’s Libra crypto project gave way to skepticism and intense regulatory scrutiny. Bitcoin still almost doubled last year.

The wider industry continues to work toward mainstream adoption while awaiting greater regulatory clarity in markets including the U.S. on issues such as a Bitcoin ETF product. Meanwhile, there is widespread debate whether the upcoming “halving” — a scheduled reduction in the amount of Bitcoin produced in mining to control inflation — will serve as a fresh driver for gains.

Technical Indicators

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

The projected upper bound is: 9,301.41.

The projected lower bound is: 8,154.25.

The projected closing price is: 8,727.83.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
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 28 white candles and 22 black candles for a net of 6 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 Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 75.8258. This is not an overbought or oversold reading. The last signal was a sell 5 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 73.97. 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 buy 27 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 135.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 2 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 26 period(s) ago.

Rex Takasugi – TD Profile

FOREX BTC= closed up 571.290 at 8,698.800. Volume was 47% above average (neutral) and Bollinger Bands were 22% wider than normal.

Open     High      Low     Close     Volume___
8,137.5008,860.8908,000.5208,698.800 126,646
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 7,986.25 7,410.33 9,094.29
Volatility: 53 49 65
Volume: 111,612 93,645 86,688

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.

Summary

FOREX BTC= is currently 4.3% below its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 9 periods. Our momentum oscillator is currently indicating that BTC= is currently in an overbought condition.

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