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Key Average Offers Support
BTC: Price: $8,420 | MCAP: $151.93 billion | 24-Hr Volume: $16.94 billion
Short-term trend: Bearish
Bitcoin is defending the widely-tracked 200-day moving average (MA) for the third straight day. The repeated recovery from sub-200-day MA levels validates the oversold conditions reported by the 14-day relative strength index (RSI). The RSI on the 4-hour chart is also hovering below 30.
Hence, a minor bounce to levels above $8,700 could be in the offing. The bounce, if any, however, will likely be short-lived, as odds are stacked in favor of the bears.
The daily chart is reporting a high-volume contracting triangle breakdown, a bearish crossover of the 50- and 100-day moving averages (MAs) and a lower highs and lower lows setup. Further, a double top bearish reversal pattern is seen on the weekly chart.
The cryptocurrency will remain on the hunt for a drop to $7,500, as long as resistance at $9,097 is intact. It is worth noting that Tuesday’s drop below the higher low of $9,097 created on May 30 confirmed the transition from the bullish higher lows, higher highs setup to bearish lower highs, lower lows setup.
Long-term trend: Teasing bearish reversal
Bitcoin is currently reporting a 13 percent drop on a month-to-date basis. The price drop marks a negative follow-through to the consecutive inside bar candles created in the previous two months.
An inside bar is considered an early warning of an impending bearish reversal if it appears following a notable price rise. BTC created inside bars in July and August, having rallied from $4,000 to $13,880 in the preceding three months.
The bullish-to-bearish trend change, however, would be confirmed only if prices end below $9,097 (first inside bar’s low) on Sept. 30. That looks likely with prices currently trading at $8,400 and the daily chart reporting a strong bearish setup.
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LOOM On A Small Breakout
LOOM: Price: $0.030| MCAP: $29.6 million | 24-Hr Volume: $12.5 million
Short-term trend: Bull exhaustion
LOOM moved against the majority of the market yesterday (Sept. 25), rising 40 percent in value over a 24-hour period and defying expectations as investors looked for a place to redistribute their positions, seen by a large injection of daily total volume.
The daily RSI is at highest point since June 12, 2019 hinting at bullish exhaustion given the nature of its rise and the historical interaction above the neutral 50 zone.
Look to a short-term pullback near $0.28 once the currently daily price action has subsided by the end of the close. Long-term trend: Neutral
Despite having fallen 76 percent over a 100-day period, LOOM buyers have a chance to push for a reversal should a firm close above $0.38 occur within the next monthly cycle as that would break the bear market structure on the daily chart.
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| ICON Falters
ICX: Price: $0.16 | MCAP: $82.1 million | 24-Hr Volume: $13.2 million
Short-term trend: Bearish
The descending triangle pattern on the daily chart for ICX finally broke to the downside on Sept. 24's leading into an 18 percent loss in a single day.
The markets are still reeling from BTC's latest bearish breakdown and with ICX now at is lowest point since being listed on the Binance exchange back in Dec. 2018. Long-term trend: Bearish
Small hope resides for ICX bulls as the technicals point to further price discovery at lower levels until investor interest begins to build once again.
Both the daily RSI and the awesome oscillator (AO) point toward on-going consolidation until the trend redefines its direction in a bull-to-bear-market flip, should that occur.
Watch for any moves lower to confirm a long-term bearish direction or whether a reversal will show up to save the faltering asset.
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Bitcoin options worth 40K are scheduled to expire on Friday.
Option expiries can affect the spot market via a process called “pinning” – option writers (sellers) try to manipulate the spot to reduce big losses.
If the market drops sharply in a particular month, the put writers incurring big losses buy the underlying asset in the spot market usually a day ahead of expiry. That creates an upward pressure on prices, triggering a recovery rally or an oversold bounce ahead of expiry.
On similar lines, a rallying market often witnesses a strong pullback while heading into expiry, courtesy of selling in the spot market by call writers.
For instance, BTC traded above $10,000 for the major part of the last 25 days and there was widespread belief that the rising hash rate and Federal Reserve’s rate cut would bode well for the cryptocurrency.
Put simply, bullish expectations were strong. So, traders may have sold out-of-the-money put options (below $9,000 or so) over the last three weeks.
Now that BTC is trading below $9,000, put writers are in losses and may buy the spot ahead of tomorrow’s expiry, possibly yielding a bounce.
However, if the market continues to fall, put writers may give up fighting the trend and switch sides, exacerbating the bearish move. |
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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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