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Bitcoin Witnessing Oversold Bounce
BTC: Price: $7,650 | MCAP: $138 Billion | 24-Hr Volume: $17.18 Billion
Short-term trend: Bearish
Bitcoin is witnessing a corrective bounce, as discussed on Thursday. The immediate bearish view, however, would be invalidated if prices print a UTC close above the former support-turned-resistance of $7,714 (Sept. 30 low).
A rejection at that level would bolster the bearish setup and could yield a deeper drop to $7,200 and $7,000.
The odds of another big sell-off, however, appear low, as bitcoin has charted a death cross – a bearish crossover of the 50- and 200-day averages. The lagging indicator trapped sellers on the wrong side of the market in 2014, 2015 and 2018.
Note that the U.S. Federal Reserve is expected to deliver 2019's third 25 basis point rate cut next week. The narrative that BTC is a hedge against monetary easing may bode well for the cryptocurrency over the next few days.
That said, the outlook would turn bullish if and when prices rise above the Oct. 21 high of $8,314, invalidating the lower highs setup.
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.
Long-term technical studies are also biased bullish. For instance, 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 would weaken if prices drop below $6,649, as the majority of bitcoin addresses will become Out of the Money (loss making positions) below that level, according to IntoTheBlock. Essentially, long-term holders may liquidate their positions below $6,649, leading to a sharp slide in prices.
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Testing The Line
BSV: Price: $110 | MCAP: $1.9 billion | 24-Hr Volume: $589.7 million
Short-term trend: Neutral
BSV has risen slightly on the day, up 12.5 percent after yesterday's (Oct. 24) breakout brought prices closer to a prior support zone now flipped to resistance at around $116.
The daily RSI is fast approaching overbought conditions once again coupled with weaker than average buying momentum seen via the Chaikin Money Flow indicator slightly above 0.
Price action in the short-term would swing to the bulls should a firm close above $116 occur.
Long-term trend: Bearish
Long-term price action and trend remains bearish below the prior resistance zone at $110-116 and requires another push to break the downward market structure of lower highs that has been on-going since June 22.
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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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