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Bitcoin Eyes Long-Term Support
BTC: Price: $7,500 | MCAP: $135 Billion | 24-Hr Volume: $20.51 Billion
Short-term trend: Bearish
Bitcoin fell more than 6 percent on Wednesday, confirming a downside break of the recent trading range of $7,800-$8,500. The range breakdown was backed by an uptick in trading volumes to the highest level since Sept. 26 and indicates the sell-off from the highs above $10,000 seen on Sept. 23 has resumed.
As a result, BTC risks falling to $7,200 – the support of the three-day chart 100-period moving average. A violation there would expose the 200-period MA at $7,000.
It is worth noting that bitcoin's hash rate or computing power has jumped to a fresh record high of 114.3 EH/s despite the price drop. Many observers believe the hash rate's rise indicates miners are anticipating higher Bitcoin prices in the future and the sell-off seen in the last 24 hours could be bear trap.
Historical data, however, shows bitcoin's price does not follow hash rate. Infact, it lags price increases but responds much quicker to the price decreases, as pointed out by Christopher Bendiksen, Head of Research at Coinshares.co.uk.
Bendiksen's argument sounds logical, as mining profitability drops with price slide. A sharp sell-off, therefore, forces miners to scale back or shut down operations, leading to a drop in the hash rate.
All-in-all, BTC's price is unlikely to see a near 90 degree rise back to levels above $8,000, tracking the record high hash rate.
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.
Read Analysis
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BasicAttentionToken Heads On Up
BAT: Price: $0.25 | MCAP: $342.2 million | 24-Hr Volume: $105.9 million
Short-term trend: Neutral
BAT has rallied 58 percent since the beginning of Oct. and crossed bullish in the mid-term above the 100-day moving average on Oct. 14 backed by higher than average bullish trading volume.
Conditions are once again fast approaching overbought as per the daily RSI, coupled with a large spike in trade volume seen Oct. 23, representing a local top given yesterday's unshapely candle close.
Expect a small pullback with a bearish pivot in the short-term should prices close back below $0.24.
Long-term trend: Neutral
Given the price position between two key moving averages (100 and 200 daily MA's, not shown) BAT is neutral bid in the long-term until a clearer direction is carved out with a break above $0.28 or a sell-off below $0.24, as previously mentioned.
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ICX: Price: $0.14 | MCAP: $70.6 million | 24-Hr Volume: $5.5 million
Short-term trend: Bearish
Yesterday's (Oct. 23) bearish candle experienced an 8.53 percent drop in value after falling toward the bottom sloping trendline within the falling wedge (typically a bullish formation).
The onus is now heavily on buyers to defend the key region at $0.13, otherwise risk falling to a new all-time low as Oct. marks the worst month in its history since first being listed on exchanges 2 years ago.
Long-term trend: Bearish
The Chaikin Money Flow (CMF) illustrates a loss in buying momentum as sellers take the day to continue the bearish lower high lower low market structure that has plagued ICX since topping out in April and May, 2019.
Don't expect too much on the rebound rally should buyers push for a breakout as the odds are heavily against the bulls long-term, until a new catalyst can revive investor expectations for the troubled crypto.
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Surprised by bitcoin's slide to five month lows?
Avocado prices had warned of a sell-off in the premier cryptocurrency at least two weeks in advance.
Avocado-Bitcoin correlation
Avocados and bitcoin bottomed out between November 2018 and March 2019, and began rising in early April.
The price of a single bitcoin surged to a highs above $13,800 at the end of June, representing more than 350 percent year-to-date gains.
Meanwhile, the average national price of a Haas avocado reached $2.10 on July 5 – up more than 75 percent. Further, prices of avocados and bitcoin pulled back sharply during the third quarter.
While bitcoin's sell-off stalled near $7,800 in the first three three weeks of October, avocados continued to lose altitude, warning that BTC may follow suit, given the tight correlation.
And bitcoin did drop. prices slipped to five-month lows near $7,290 on Wednesday and looks set to decline further to $7,000.
It is worth noting that correlation does not mean causation. That said, many observers have associated the positive correlation with Millennials' love for bitcoins and avocado.
It will be interesting to see if the correlation remains valid in the near future, as bitcoin is set to undergo mining reward halving in May 2020. Historically, reward halvings have put a strong bid under the cryptocurrency at least six months in advance. |
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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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