Bitcoin: USD/BTC (BTC=X) Rallies as the Bull Market Reaches New Highs
Bitcoin started the year with a bang. In the last 24 hours it went up 3%, topping $9,000. The entire week has been exciting week, with one rally after another feeding the bulls. Bitcoin has exploded by over 30% since January 1, and we’re just a couple of weeks into 2020. What a difference from what happened in January 2018. Market watchers are pointing to Bitcoin’s halving as the catalyst for the next big price push.
There are two major forces we need to consider. On one end we have the Chinese New Year, which has always been bad for cryptocurrencies. On the other, political uncertainty is providing a fertile ground for the value of cryptocurrencies. Both these forces are pulling crypto from opposite ends and will cause major price swings in the moths to come.
For some reason Chinese New Year has always been bad news for Bitcoin. This year, just like the last four years, you can expect, a little dip right before the Chinese New Year. In January 2019, Bitcoin dipped to around $3,300. In 2018, the Chinese New Year, kicked off the bear market, with a huge slide from around $16,000 to $5,000. In 2017 we had a mini dip, dropping from $1,200 to $700. Some people attribute the price drops to the Chinese cashing out and giving gifts to family and friends. Personally, think a lot of market makers take time off, and as a result potential orders don’t get filled, which causes the entire market to drop.
On the other end of the spectrum, Bitcoin’s decentralized governance combined with the global uncertainty, because of the relations between the United States and Iran, Trump impeachment and the US and China trade war are pushing people towards crypto and driving prices up. People are trying to find ways to maintain the value of their assets, avoid potential confiscation and limit effects of the possibility of the US government printing money to fund a war.
On May 13th the halving will be important, because it will directly impact the amount of Bitcoin produced per day. Today, 12.5 coins are created every 10 minutes, with a total of 1,800 Bitcoins per day and a value of around $14 million. That number will drop to 6.25 and along with that, inflation will drop. Even though halving event is not a secret, it’s part of Bitcoin’s predictable monetary policy, most of the the general public does not know exactly what the halving means, and this will create most likely create FOMO.
But beyond halving, Bitcoin’s upgrade later this year the could be another important driving force. The soft fork, which will most likely happen int the last quarter fo the year is expected to improve Bitcoin’s privacy and scalability. Schnorr signatures, Taproot schemes and Tapscript language, will bring smart contracts to Bitcoin, eliminate penalties in terms of fees for multisig wallets and improve security with Taproot.
Crypto assets, are here to stay and prices will rise. Governments, central banks and big tech is coming in. Look at China’s central bank, Libra and JP Morgan for example. But thinking that Bitcoin and crypto will go ballistic because of the halving or something else, is just wishful thinking. Volatility is the name of the game, so expect a lot of crazy swings, as bulls and bears duke it out.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 8,134.55.
The projected upper bound is: 9,336.32.
The projected lower bound is: 8,235.02.
The projected closing price is: 8,785.67.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 30 white candles and 20 black candles for a net of 10 white 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 40.5316. This is not an overbought or oversold reading. The last signal was a sell 2 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 67.00. 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 sell 2 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 46. This is not a topping or bottoming area. The last signal was a sell 2 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 33 period(s) ago.
Rex Takasugi – TD Profile
FOREX BTC= closed up 85.240 at 8,756.900. Volume was 6% below average (neutral) and Bollinger Bands were 49% wider than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 8,639.54 7,595.90 9,007.27
Volatility: 46 47 62
Volume: 114,535 96,668 87,072
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 2.8% below its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. 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 16 periods.
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