Bitcoin Comatose Amid Risk-On in Financial Markets
BTC: Price: $8,300 | MCAP: $150 Billion | 24-Hr Volume: $14.78 Billion
Short-term trend: Bearish
Bitcoin is lacking a clear directional bias amid the US-China trade truce and the resulting improvement in the risk sentiment in the global financial markets.
Many observers consider BTC as a safe haven, however, a recent study showed majority of cryptocurrency traders are thrill-seekers. Put simply, BTC is still a risk asset.
While that may be true, the top cryptocurrency is yet to cheer the fading US-China trade tensions. BTC has been restricted largely to a narrow range of $8,250 to $8,450 since Oct. 11.
The 4-hour chart shows the consolidation is preceded by a failed breakout and a rising channel breakdown – a bearish setup. Further, the cryptocurrency is struggling to rise above the 200-day moving average, a barometer of long term trend.
BTC, therefore, risk revisiting recent lows below 7,800. The bearish case would weaken if prices rise above the 200-day average, currently located at $8,739.
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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0x Takes The Crown
ZRX: Price: $0.33 | MCAP: $199.5 million | 24-Hr Volume: $63.2 million
Short-term trend: Bullish
0x is officially trending bullish after closing above the 200-day moving average on Oct 9.
Up 20.46 percent on the day, the case for continuation is strong, however take note of the higher high price action and lower high's on the RSI (typically viewed as a bearish divergence).
The distance from the 200-day moving average will determine how exuberant the market becomes in the following days ahead, so be mindful of a pullback on the lower timeframes.
Long-term trend: Bullish
0x has flipped the Super Guppy to green (not shown) for the first time since June 30 and is demonstrating signs of a long-term bullish continuation should prices remain firmly bid above the aforementioned 200-day moving average.
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| Bytecoin Biggest Loser
BCN: Price: $0.000362 | MCAP: $66.5 million | 24-Hr Volume: $21,238
Short-term trend: Bearish
BCN continues its trend southward after failing to defend from a sharp sell-off seen in yesterday's bearish candle UTC close.
Down 19.98 percent over a 24-hour period BCN continues to range in bearish fashion within a 126-day channel.
The awesome oscillator (AO) offers some hope of a bullish revival but that remains to be seen with a green histogram bar moving above 0 out of reach for the remainder of the week.
Long-term trend: Bearish
The 200-day moving average (blue line) demonstrates just how far BCN has fallen from grace.
The bulls will need to begin showing up in larger numbers in hopes of reversing damage done from June 26 to present's gradual sell-off.
A firm close above $0.00063301 would abort the bearish view.
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Bitcoin is set to undergo mining reward halving sometime in May 2020.
The reward halving is aimed at curbing inflation by reducing the reward for mining on the blockchain by 50 percent. The process is repeated every four years.
The previous two reward halvings conducted in November 2012 and July 2016 had marked the beginning of the next bull market. For instance, BTC rallied from $500 to a record high of $20,000 in 17 months following the July 2016 halving.
Most observers are expecting the upcoming reward halving to put a strong bid under bitcoin. However, Jihan Wu, co-founder and ex-CEO of Bitmain, is “pessimistic” about the prospect of a price surge after the halving.
Wu believes people started to bet on the price growth in advance and the good news would be baked in before May 2020. Bitcoin, therefore, may take a beating following the reward halving.
Also, Wu fears the May 2020 halving may crowd out retail miners. This is because the mining profitability will drop at least for the short-term following the reward halving, crowding out most inefficient miners. |
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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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