Bitcoin: USD/BTC (BTC=X) Jumps to 3-Week High Near $8,600
Bitcoin (BTC) jumped 5.1 percent on Wednesday to the highest price in three weeks, after the Federal Reserve (Fed) said it would print money to expand the size of bank reserves – seen as a move by the U.S. central bank that could spark inflation.
Bitcoin suffered a steep drop in late September, tumbling from above $10,000, a move analysts attributed to big margin calls on the Bitmex exchange and disappointment over the debut of a new futures contract on the Intercontinental Exchange’s Bakkt digital-asset trading platform.
During the monthly futures contract’s first week of trading, it managed to garner just $5 million of total volume, disappointing industry observers who had anticipated a higher uptake from big institutional investors.
But on Tuesday, Federal Reserve Chair Jerome Powell said the central bank will soon start expanding its balance sheet again in an effort to avoid a repeat of the recent turmoil in the money markets. Powell said the Fed may have to keep pumping money into the financial markets by buying securities in the coming days in order to ensure the smooth functioning of short-term lending markets.
Joe DiPasquale, CEO of the cryptocurrency-focused investment firm BitBull Capital in San Francisco, said in a phone interview that bitcoin prices typically rise when the Federal Reserve loosens monetary policy – such as earlier this year, when the central bank’s first interest-rate cuts in a decade helped push prices to a 2019 high around $12,900 in late June.
“We know that that has historically helped bitcoin,” DiPasquale said.
Bitcoin prices have more than doubled from where they started 2019, around $3,700.
There’s also speculation in the market that the U.S. Securities and Exchange Commission might approve a bitcoin-based exchange-traded fund (ETF) from Bitwise, which says on its website that it pioneered the first cryptocurrency index fund.
Some investors and analysts describe the Fed’s latest operation as round four of quantitative easing (QE) – central bank purchases of government securities or other securities from the market to increase the money supply and encourage lending and investment. The Fed conducted three rounds of quantitative easing between 2009 and 2015.
Many observers are of the opinion that the QE programs are inflationary in nature and consider bitcoin as a hedge against such policies.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 9,267.12.
The projected upper bound is: 9,361.29.
The projected lower bound is: 7,748.57.
The projected closing price is: 8,554.93.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 22 white candles and 28 black candles for a net of 6 black 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).
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 83.2626. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 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 45.18. 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 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 186.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 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 5 period(s) ago.
Rex Takasugi – TD Profile
FOREX BTC= closed down -0.620 at 8,586.500. Volume was 95% below average (consolidating) and Bollinger Bands were 0% wider than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 8,253.33 9,506.58 8,613.87
Volatility: 44 55 80
Volume: 80,852 79,973 85,268
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 0.3% below its 200-period moving average and is in an downward trend. Volatility is Our volume indicators reflect moderate flows of volume out of BTC= (mildly bearish). Our trend forecasting oscillators are currently bearish on BTC= and have had this outlook for the last 16 periods.