Bitcoin: USD/BTC (BTC=X) potentially facing massive crash
Bitcoin’s slow descent over the last month took a dramatic turn today as the cryptocurrency suddenly nosedived. Already reeling from a series of downturns during the last four weeks, BTC had been languishing above $8,100 after falling from $8,800 this time last week.
Its ability to cling on to $8,000 was tested today and bitcoin was found wanting. A 3 percent slump now sees the market-dominating crypto fighting for stability above $7,800. Alarmingly, with little to shout about in terms of resistance, unless the price gets back above $8,000 with some conviction, the signs are that a huge correction is on the cards.
A break down from the current price could well result in a $2,000 move that would see BTC flailing for support at $5,900 where historic buy-in interest has been waiting before.
Of course, there can be no guarantee that the market is certain to fall a further $2,000 in the next few days.
Its current value within touching distance of $7,900 is in the vicinity of historic support, and the $7,400 line was the elastic which catapulted BTC back above $10k barely a month ago.
A similar pattern could be played out if the market can hold the current price until the weekend.
However, if it can’t climb above $8,000 in that same timeframe, then a daily chart death cross (where short-term and long-term moving averages collide) seems an inevitability.
This almost always signals a serious bearish outlook and heralds a mass sell-off. Intriguingly, this has only happened on two occasions in the last five years and, each time, it led to pull-backs of between 60 percent and 70 percent.
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 8,756.38.
The projected upper bound is: 8,420.27.
The projected lower bound is: 6,770.46.
The projected closing price is: 7,595.37.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 17 white candles and 33 black candles for a net of 16 black candles.
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 24.8245. This is not an overbought or oversold reading. The last signal was a sell 22 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 29.08. 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 buy 45 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 -196.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 4 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 13 period(s) ago.
Rex Takasugi – TD Profile
FOREX BTC= closed down -523.300 at 7,608.400. Volume was 30% below average (neutral) and Bollinger Bands were 2% narrower 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: 8,369.66 8,548.09 9,367.41
Volatility: 44 64 79
Volume: 66,351 77,969 85,853
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 18.8% below its 200-period moving average and is in an downward trend. Volatility is low as compared to the average volatility over the last 10 periods. 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 7 periods. Our momentum oscillator is currently indicating that BTC= is currently in an oversold condition.
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