Bitcoin drops into four figures as lagging indicator threatens to turn bearish
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BTC Hits 18-Day Low
BTC: Price: $9,870 | MCAP: $177.75 billion | 24-Hr Volume: $17.27 billion
Short-term trend: Bearish
Bitcoin fell to an 18-day low of $9,600 in the Asian trading hours, validating the bearish setup on the 4-hour chart: a failed wedge breakout followed by a bearish lower high.
So, a deeper drop to levels below $9,500 could be in the offing. Supporting the bearish case are key indicators like the 14-day relative strength index and the weekly moving average converge histogram.
The bearish case would weaken if prices rise above $10,458, invalidating the bearish lower highs setup on the 4-hour chart. The outlook, however, would turn bullish only if prices print a UTC close above $10,958 – the upper edge of a three-month-long contracting triangle on the daily chart.
The 50- and 100-day moving averages are about to produce a bearish crossover for the first time since September 2018. The long-term MA crossovers, however, are lagging indicator known to trap sellers on the wrong side of the market.
Long-term trend: Neutral
Bitcoin's monthly chart shows a double inside bar pattern – August’s candle falls within July's high and low and July’s candle is engulfed by June's high and low.
Double inside bars indicate indecision and lack of volatility and are considered a sign of bullish exhaustion, if they occur after a notable price rally, which seems to be the case here.
Also, the selling volume witnessed in July was the highest since March 2018. So, the long-run outlook stands neutralized.
A break above the high of the first inside bar ($13,200) is needed to revive the bullish outlook and a move below the low of the first inside bar ($9,049) will confirm a bearish reversal.
Traders can also take a weekly (Sunday, UTC) close or consecutive high-volume daily closes above $12,000 as a sign of bullish continuation. After all, a weekly close above $12,000 has remained elusive the last week of June.
For instance, the 50-day MA fell below the 100-day MA on Aug. 29, 2016, when BTC was trading near $570. The cryptocurrency remained flatlined in the next couple of days before rising above $600 on Sept. 4.
Read Analysis
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Stellar Continues To Dominate
XLM: Price: $0.07912 | MCAP: $1.73 billion | 24-Hr Volume: $479.2 million
Short-term trend: Bull breakout (overbought)
Rising in strong bullish fashion from the falling wedge breakout, first witnessed on Sept. 17 with a solid push from buyers the following day on Sept. 18, saw its value soar 41 percent before capping out growth just below the 100-period moving average on the daily chart at $0.08263.
The awesome oscillator has triggered its first buy signal in over 128 days indicating that the momentum from the bulls is both legitimate and significant. However, the short-term trend will likely invoke a pullback, courtesy of an overbought daily RSI reading above 70.
Watch to see whether or not price action can push beyond a well defined area of resistance (formerly support) at $0.08648, backed by consistent levels of growing bullish volume.
Long-term trend: Neutral
The initial breakout move brought prices to the range of former supports aforementioned and will need to break that market structure with conviction in order to generate further interest and investment as the long-term trend is now thrown into contention from its bullish daily breakout.
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| RIF Token Slips
RIF: Price: $0.14 | MCAP: $13.1 million | 24-Hr Volume: $5.9 million
Short-term trend: Neutral
Low market cap coin with limited price data on the daily chart, so look to the 3-day chart which provides a bearish analysis of a pullback based on recent rallies witnessed June 24 - Sept. 4.
The awesome oscillator (AO) is backing the bearish assessment as the histogram bars begin to tick lower toward the neutral 0 level, an indication that buyer momentum is waning.
So look to the 100-period moving average (MA) on a swing down, to see whether or not it can convert that region into a base of support for another leg higher.
Long-term trend: Neutral
Down 6.2 percent on the day as a result of limited trading activity and a lack of demand from retail investors as they look to lock in and realize profit from the recent rallies seen in August.
Look toward the mentioned 100-period MA at around $0.12 to see if its market structure holds, or whether we could be witnessing the start of a new bear cycle bringing prices down to prior resistances near $0.10.
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Bitcoin shorts on the cryptocurrency exchange Bitfinex jumped to 69-day highs in the Asian trading hours today. The bearish bets have increased by 65 percent over the last 15 days.
Also, the long-short ratio (the ratio of bullish to bearish bets) has dropped to 2.08, the lowest level since July 11, having hit a high of 4.05 in August and 4.79 in July.
The long-short ratio's slide indicates the bullish bias has weakened significantly over the last two months.
That said, the reliability of the data is under question as BTC/USD's trading volumes on Bitfinex have dropped significantly over the last twelve months – volumes were 100k BTC per day a year ago. Today it's less than 3k, according to Attorney/Solicitor Preston Byrne.
Long-short ratio
The long-short ratio is considered a barometer of investor expectations. A high ratio indicates that more long positions are being held relative to short positions and implies positive investor expectations.
A low ratio indicates that more short positions are being held relative to short positions and implies bearish investor expectations.
Typically, a reading above 1 is considered bullish and a below-1 print is taken as a bearish sign.
Also, an usually high or low ratio is often considered a sign of over exuberance or pessimism and an advance warning of an impending bearish/bullish reversal. |
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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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