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Bitcoin: USD/BTC (BTC=X) Price Surges Above $6.7K as Stocks Again Bearish

Bitcoin: USD/BTC (BTC=X) Price Surges Above $6.7K as Stocks Again Bearish

Since topping out at $6,500 on March 31, Bitcoin (BTC) price had spent the majority of Wednesday in a steady slump which saw the price drop from $6,494 to $6,147. The pullback mirrored the poor performance in traditional markets where the S&P 500 and Dow dropped by 4.41% and 4.44% respectively. 

The slump in traditional markets appeared to be a reaction to dismal news that the United States surpassed more than 200,000 Coronavirus cases. Earlier this week the White House also stated that it concurs with the estimate that up to 240,000 Americans could die from COVID-19 within the next 3 weeks. 

If true, this would likely extend the time social distancing and mass quarantine policies stay in effect, leading to additional damage to the economy. As advised by many market analysts, global markets are unlikely to show signs of bottoming until the Coronavirus pandemic is brought under control. 

Surprisingly, shortly after equities markets closed Bitcoin price broke from the pattern of lower highs with a sharp upside move which pushed the price to $6,744. 

The move came as the price was on the verge of falling below the $6,200 support to complete the right shoulder of a rather sloppy head and shoulders pattern on the 4-hour time frame. 

Had that occurred, traders would be looking at a target near $5,150 so for bulls the current surge above the $6,600 resistance level is probably a welcome relief. 

Technical Indicators

Overall, the bias in prices is: Downwards.

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

The projected upper bound is: 7,921.16.

The projected lower bound is: 5,190.78.

The projected closing price is: 6,555.97.

Candlesticks

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 17 white candles and 33 black candles for a net of 16 black candles.

An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend. It then signifies that the momentum may be shifting from the bears to the bulls.

If the engulfing bullish pattern occurs during an uptrend (which appears to be the case with FOREX BTC=), it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle’s real body.

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 70.0932. This is not an overbought or oversold reading. The last signal was a buy 20 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 48.40. 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 14 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 62. This is not a topping or bottoming area. The last signal was a sell 6 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 12 period(s) ago.

Rex Takasugi – TD Profile

FOREX BTC= closed up 281.070 at 6,631.100. Volume was 136% above average (neutral) and Bollinger Bands were 14% narrower than normal.

Open     High      Low     Close     Volume___
6,345.3706,773.0006,332.7706,631.100 788,504
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 6,489.42 7,805.76 8,195.36
Volatility: 84 132 82
Volume: 783,709 491,365 195,780

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 19.1% below its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 0 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.

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