Bitcoin: USD/BTC (BTC=X) looks set to test support near $7,500
Bitcoin fell sharply on Tuesday, confirming a bearish reversal and opening the doors for a test of crucial price support near $7,500.
The leading cryptocurrency by market value ran into selling pressure around $9,700 in the early U.S. trading hours and fell to a 3.5-month low of $7,998 at 19:45 UTC on Bitstamp.
BTC had been on slippery ground following Tuesday’s volatility band breakdown. A widely-followed indicator was also reporting the strongest a bear bias in nine months, as discussed earlier this week.
The price slide was likely exacerbated by a long squeeze, when investors square off (or sell) long positions to cut losses in a falling market, thereby creating further downward pressure on prices.
So, while a price drop was expected, the magnitude of the sell-off has caught many by surprise. The cryptocurrency fell by 11.83 percent on Tuesday – 2019’s third-biggest single-day drop, as per Bitstamp data.
- BTC has seen double-digit daily losses four times this year.
- The biggest single-day loss of 2019 witnessed on June 27 marked a healthy correction from a 17-month high of $13,880 reached on the preceding day.
The latest double-digit price slide has taken the cryptocurrency below major support levels. Therefore, a deeper drop toward $7,500 – a level seen a week ahead of Facebook’s launch of Libra – could be seen over the next few days.
As of writing, BTC is changing hands around $8,400 on Bitstamp. It’s worth noting the cryptocurrency is still up about 127 percent on a year-to-date basis.
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 9,918.52.
The projected upper bound is: 9,292.74.
The projected lower bound is: 7,467.99.
The projected closing price is: 8,380.36.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 black candles.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
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 24.9263. This is not an overbought or oversold reading. The last signal was a buy 15 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 24.18. This is where it usually bottoms. 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 91 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 -166.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 6 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 sell 6 period(s) ago.
Rex Takasugi – TD Profile
FOREX BTC= closed down -51.860 at 8,449.120. Volume was 92% below average (consolidating) and Bollinger Bands were 3% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 9,615.75 10,242.32 8,319.42
Volatility: 74 58 80
Volume: 64,575 79,365 83,179
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 1.6% above its 200-period moving average and is in an downward 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 out of BTC= (mildly bearish). Our trend forecasting oscillators are currently bearish on BTC= and have had this outlook for the last 2 periods. Our momentum oscillator is currently indicating that BTC= is currently in an oversold condition.