Bitcoin: USD/BTC (BTC=X) sellers are again struggling to force a sustained break
Bitcoin (BTC) sellers are again struggling to force a sustained break below a widely-followed support level, but the outlook would turn bullish only above $10,956.
The premier cryptocurrency by market value fell by $600 in the Asian trading hours on Wednesday, confirming a rising wedge breakdown on the intraday charts.
The bearish reversal pattern opened the doors for a retest of the Aug. 15 low of $9,467, as discussed yesterday. So far, however, that target has remained elusive and the dips below the 100-day moving average (MA), currently at $9,900, have been short-lived.
It’s worth noting that the long-term MA worked as strong support earlier this month. The cryptocurrency ran into bids below the 100-day MA on Aug. 15 and closed (UTC) that day with gains above $10,300. The average was again defended on the following day and the subsequent price bounce ended up hitting highs above $10,950 on Aug. 20.
So, if the 100-day MA continues to hold ground over the next few hours, chart-driven buying could lead to a price bounce.
The lower wick attached to today’s candle (above left) represents a failure on the part of the bears to keep the cryptocurrency below the 100-day MA. The average also proved a tough nut to crack on Wednesday.
The repeated defense of the key MA, coupled with the bullish divergence (higher lows) of the hourly chart relative strength index (above right) indicates scope for a rise to $10,300 over the next few hours.
The path of least resistance, however, will remain to the downside as long as prices are held below $10,956 – the bearish lower high created on Aug. 20.
The bulls will likely have a tough time forcing a break above $10,956, as the daily chart indicators are biased bearish. For instance, the RSI is holding below 50 and the moving average convergence divergence (MACD) histogram is printing negative values.
Further, the 5- and 10-week moving averages have produced a bearish crossover, as discussed earlier this week.
The fact that last week’s bounce from the 100-day MA ended up charting a bearish lower high indicates a weakening of bullish sentiment.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
The projected upper bound is: 11,483.27.
The projected lower bound is: 8,808.39.
The projected closing price is: 10,145.83.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 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 33.5245. This is not an overbought or oversold reading. The last signal was a buy 8 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 43.90. 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 57 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 -66. This is not a topping or bottoming area. The last signal was a buy 5 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 9 period(s) ago.
Rex Takasugi – TD Profile
FOREX BTC= closed down -3.480 at 10,176.520. Volume was 94% below average (consolidating) and Bollinger Bands were 13% 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: 10,328.48 10,703.98 7,256.13
Volatility: 61 79 79
Volume: 81,073 89,176 81,537
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 40.2% 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 18 periods.