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Bull Reversal is Still $600 Away
BTC: Price: $8,240 | MCAP: $148.68 Billion | 24-Hr Volume: $16.32 Billion
Short-term trend: Neutral
Bitcoin bounced up from $7,800 over the weekend, neutralizing the immediate bearish setup. After all, that was bitcoin's fifth defense of $7,800 since Sept. 26 and indicates seller exhaustion.
Other key indicators like the relative strength index are also reporting early signs of a bullish reversal.
That said, BTC is yet to invalidate the most basic of all bearish technical indicators – a lower high, lower low – with a move above Oct. 11's high of $8,820 (Bitstamp prices). That level could come into play, as the hourly and 4-hour charts are reporting bullish conditions.
A UTC close above $8,820 would confirm a bearish-to-bullish trend change. On the downside, $7,800 is the level to beat for the bears.
Note that China unexpectedly kept the loan prime rate steady at 4.20 percent during the Asian trading hours as opposed to market expectation for a minor cut to 4.15 percent. Even so, the global equity markets are flashing green with the futures on the S&P 500 adding 0.40 percent at press time.
The improved risk appetite observed in the global equity markets could bode well for bitcoin and other cryptocurrencies
Long-term trend: Bullish
Bitcoin's long-term outlook is bullish, as mining reward halving is due in May 2020. The bullish case looks stronger if we take into account the strengthening narrative that the top cryptocurrency is a digital gold and a hedge against inflation.
Many observers believe the negatives interest rate era could force traditional investor to pour money into cryptocurrencies. After all, BTC is the best performing asset of 2019 and possibly of the decade.
Technical charts, however, are reporting conflicting signals. To start with, the 100- and 200-period averages have produced a bullish crossover on the three-day chart. A similar bull cross in March 2016 was followed by a 21 month bull market.
The bullish case, however, looks weak on the longer duration charts. Bitcoin closed below $9,049 on Sept. 30, confirming a bearish inside bar candlestick reversal on the monthly chart.
The cryptocurrency had charted consecutive inside bar candlesticks in July and August, indicating indecision or consolidation.
The tug of war between the bulls and the bears ended with a 20 percent drop in September. Further, the weekly relative strength index is now reporting bearish conditions with a below-50 print.
The bearish candlestick arrangement takes precedence over the bullish crossover on the three-day chart, as the latter is a lagging indicator. Furthermore, the cryptocurrency was sidelined for weeks following the March 2016 bull cross and the bull market had resumed at the end of May 2016.
Put simply, BTC could suffer a deeper drop to $7,200, as suggested by the monthly chart, before resuming the bull market.
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Bitcoin SV Logs Double-Digit Gains
BSV: Price: $106 | MCAP: $1.87 Billion | 24-Hr Volume: $408 million
Short-term trend: Teasing bull reversal
Bitcoin SV (BSV) is currently reporting 16 percent gains on a 24-hour basis. The ninth largest cryptocurrency as per market capitalization is the best performing top 100 cryptocurrency on CoinMarketCap.
Notably, the majority of the gains happened during the sixty minutes to 11:00 UTC when prices rose from $96 to $108.49 – the highest level since Sept. 24, according to Bitfinex.
The outlook would turn bullish if prices close above $102 today, confirming an upside break of the trendline connecting June 22 and Sept. 8 highs. If the breakout is backed by a notable uptick in trading volumes, BSV will likely rise further toward $130 in the short-term.
Long-term trend: Neutral
The recent rise from lows near $66 has neutralized the bearish setup. That said, the cryptocurrency is yet to invalidate the most basic of all technical patterns – a bearish lower high – with a move above $130.
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Losing Steem
STEEM: Price: $0.139790 | MCAP: $48 million | 24-Hr Volume: $22 million
Short-term trend: Neutral
STEEM is currently down 4 percent on a 24-hour basis. The cryptocurrency is posting losses despite the risk-on mood in the cryptocurrency markets.
The outlook, however, remains neutral with prices still trapped in a recent trading range of $0.13 to $0.165. A UTC close above the upper edge could yield a rise to $0.20. On the other hand, a range breakdown, if confirmed, would shift risk in favor of a drop to $0.08 (November 2016 low).
A breakout looks likely as the cryptocurrency has created back-to-back daily candles with long upper wicks. These candles have appeared following a notable price drop and indicate the buyers are beginning to test sellers' resolve to keep prices low. That is widely considered an early warning of an impending rally.
Long-term trend: Neutral
The series of lower highs and lower lows seen on the weekly chart indicates the path of least resistance is to the downside. That said, the downside looks limited as key indicators are reporting oversold conditions.
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Bitcoin is looking south as per technical charts and a crash to $2,000 could be in the offing, according to popular bitcoin skeptic and a "perma gold bull" Peter Schiff.
Schiff's bearish call is based on the bear flag pattern and potential head-and-shoulders pattern on the daily chart.
A bear flag is a bearish continuation pattern, which usually accelerates the preceding sell-off. As of now, BTC is trapped in a bear flag.
A breakdown, if confirmed, would open the doors to $6,000. Further, it appears as though BTC is charting a right shoulder of a head-and-shoulders pattern.
A potential head-and-shoulders breakdown would create room for a drop to $2,000 (target as per the measured move method).
That said, technical patterns do not always work and their success rate depends on broader market conditions and fundamentals.
The cryptocurrency is set to undergo reward halving next year. In past, BTC has picked up a strong bid at least six months ahead of the halving.
With the next halving due in May 2020, BTC could repeat history by bottoming out next month.
Further, moving average studies are indicating the cryptocurrency may be nearing a major bottom. For instance, the 50- and 200-day averages are set to produce a bearish crossover, popularly known as the "death cross" – a lagging indicator, which has trapped sellers on the wrong side of the market in the past.
All-in-all, the probability of BTC falling to $2,000 in the near term is very low. |
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| Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. |
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