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Bitcoin: USD/BTC (BTC=X) Nosedives Amid Market Volatility

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Bitcoin: USD/BTC (BTC=X) Nosedives Amid Market Volatility

Bitcoin’s value has seen better days amid the strife and turmoil of the global financial markets as the coronavirus continues to wreak havoc, according to Reuters.

The value of the well-known cryptocurrency fell far on Thursday (March 12) as traders sold off assets, fearing the worst.

Economic damage from the coronavirus, which has now been classified as a global pandemic and has sent world’s economies into flux as people stop working and shutter themselves in their homes, can’t fully be quantified yet, according to analysts.

Bitcoin saw its value decline around 25 percent on morning trading, although it was able to eke out small gains later on. It has lost around 30 percent of its value over the last week. The last numbers had it down 22 percent at $6,206, its biggest daily loss in years.

Jamie Farquhar, portfolio manager at NKB, a London-based crypto firm, told Reuters that bitcoin’s losses are simply in unison with the others across the spectrum of trades seeing a slump right now.

“We’ve seen de-risking across all asset markets,” Farquhar said, according to Reuters. “Bitcoin is certainly not immune to that.”

The disease that the coronavirus causes, COVID-19, is highly-infectious, and there’s still no way cure it. U.S. President Donald Trump this week banned travel from Europe in an attempt to contain the virus.

Many people still doubt bitcoin’s ability to hold up as a cryptocurrency despite a reputation among prominent leaders like Twitter and Square’s Jack Dorsey as dependable and reliant. The coin is subject to violent swings in value and has not yet taken off in the mainstream as a credible mode of payment.

The virus has allowed some FinTechs to stretch their muscles on how to deal with crises, as many stocks logged their worst days since the 2008 recession. While another recession is not certain, the questions still hang in the air.

Technical Indicators

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 8,439.78.

The projected upper bound is: 6,066.51.

The projected lower bound is: 3,619.46.

The projected closing price is: 4,842.98.

Candlesticks

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 21 white candles and 29 black candles for a net of 8 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 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 17.5468. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 6 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 16.26. 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 29 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 -265.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 11 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 sell 5 period(s) ago.

Rex Takasugi – TD Profile

FOREX BTC= closed down -858.100 at 4,910.200. Volume was 10% above average (neutral) and Bollinger Bands were 199% wider than normal.

Open     High      Low     Close     Volume___
5,722.4605,970.7403,850.0204,910.200 210,813
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 7,849.12 9,109.36 8,595.32
Volatility: 190 107 73
Volume: 358,651 266,029 131,088

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 42.9% below 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 21 periods. Our momentum oscillator is currently indicating that BTC= is currently in an oversold condition.

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