Bitcoin: USD/BTC (BTC=X) risks falling back to recent lows below $9,500
Bitcoin (BTC) risks falling back to recent lows below $9,500, having strengthened the short-term bearish case with a $700 drop earlier today.
The top cryptocurrency fell from $10,843 to $10,082 in the eight hours to 07:00 UTC, confirming an end of the bounce from the Aug. 15 low of $9,467.
Prices slipped into four digits on Aug. 13 and extended gains to levels above $10,900 on Monday. That was bitcoin’s fourth quick recovery from sub-$10,000 levels since the beginning of July.
As a result, some observers are convinced that a new base has been established under $10,000 and the cryptocurrency could soon resume the rally from April’s low near $4,050.
While that seems logical, the latest bounce from $9,467 lacked volume support, as discussed yesterday, and was expected to be short-lived.
Hence, the price drop seen today is not surprising and could be extended further, as it marks a downside break of a rising wedge pattern, a bearish reversal setup, created by the recent price rise from $9,467 to $10,956.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
The projected upper bound is: 11,397.05.
The projected lower bound is: 8,704.73.
The projected closing price is: 10,050.89.
A black body occurred (because prices closed lower 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 27 white candles and 23 black candles for a net of 4 white candles.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
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 45.1148. This is not an overbought or oversold reading. The last signal was a buy 7 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 42.78. 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 56 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 -81. This is not a topping or bottoming area. 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 8 period(s) ago.
Rex Takasugi – TD Profile
FOREX BTC= closed down -88.050 at 10,076.950. Volume was 96% below average (consolidating) and Bollinger Bands were 15% narrower than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 10,387.08 10,732.61 7,221.81
Volatility: 65 79 79
Volume: 79,784 89,294 81,438
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 39.5% above 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 volume flowing into and out of BTC= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on BTC= and have had this outlook for the last 17 periods. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.