Bitcoin price declined heavily and later found support near the $3,630 level against the US Dollar.The price recovered recently and traded above the $3,700 and $3,750 resistance levels.There is a short term ascending channel in place with resistance at $3,880 on the hourly chart of the BTC/USD pair (data feed from Kraken).The pair is likely to face a strong resistance near the $3,880 and $3,900 levels in the near term.Bitcoin price started a decent recovery above $3,750 against the US Dollar. However, BTC is likely to struggle near the $3,900 resistance and it could later extend slides.Bitcoin Price AnalysisYesterday, we saw a nasty decline from the $4,188 swing high in bitcoin price against the US Dollar. The BTC/USD pair traded sharply lower and broke the $4,000 and $3,800 support levels. It traded close to the $3,600 level and found support near $3,630. A base was formed and later the price recovered above the $3,700 resistance. There was a break above the 23.6% Fib retracement level of the recent decline from the $4,188 high to $3,628 low.Buyers even managed to push the price above the $3,750 and $3,800 levels. However, the previous support at $3,860 acted as a strong resistance. At the outset, there is a short term ascending channel in place with resistance at $3,880 on the hourly chart of the BTC/USD pair. The pair recently tested the channel support at $3,775 and bounced back. However, there are many hurdles on the upside, starting with $3,860. The main resistance zone is near the $3,880 and $3,900 levels.Besides, the 50% Fib retracement level of the recent decline from the $4,188 high to $3,628 low is at $3,908 to act as a resistance. Finally, the 100 hourly simple moving average is positioned near the $3,920 level. Therefore, it seems like there is a strong resistance formed near $3,900 and the 100 hourly SMA. Only a successful close above the $3,920 level could start a fresh upward move in the near term. If not, the price could resume its slide below the $3,750 support.Looking at the chart, bitcoin price recovered nicely from the $3,630 support. Having said that, sellers are still in control as long as the price is below $3,900 and $3,920. If there is a fresh decline, the price could revisit the $3,630 and $3,600 support levels.Technical indicatorsHourly MACD – The MACD is about to move back in the bearish zone.Hourly RSI (Relative Strength Index) – The RSI for BTC/USD failed to stay above the 50 level and it is currently moving lower.Major Support Level – $3,750 followed by $3,650.Major Resistance Level – $3,860, $3,880 and 3,900.
Archives for February 25, 2019
The total crypto market cap found support near $121.0B and later recovered above $124.0B.EOS price corrected lower sharply and traded below the $3.80 and $3.60 support levels.Bitcoin cash price is currently trading nicely above the $132 and $130 supports.Tron (TRX) price is under pressure below the $0.0250 and $0.0248 resistance levels.Cardano (ADA) price is currently holding the $0.0420 support area, with a positive angle.The crypto market recovery is facing a lot of hurdles on the upsides. Gains in bitcoin (BTC), Ethereum (ETH), EOS, BCH, ripple, tron (TRX), ADA and other altcoins are likely to face resistance.Bitcoin Cash Price AnalysisBitcoin cash price failed to stay above the $145 and $140 support levels against the US Dollar. The BCH/USD pair declined sharply and broke key supports near the $140 and $138 levels. However, the $130-132 zone acted as a support and later the price corrected higher.It is currently up around 3.5% and it could retest the $140 resistance level. If there is an upside break above the $140 resistance, the price may perhaps revisit the $145 level. On the downside, the key supports are near $135 and $132.EOS, Tron (TRX) and ADA Price AnalysisEOS price trimmed most of the last week’s gains from well above the $4.00 level. The price traded below the $3.85 and $3.80 support levels to start a bearish wave. The price even broke the $3.60 support level. At the moment, the price is trading above the $3.50 support and it seems like it could correct higher towards the $3.65 and $3.70 resistance levels.Tron price remained in a bearish zone below the $0.0250 resistance level. There were mostly bearish moves in TRX and the price declined below the $0.0250 and $0.0248 support levels. It must stay above the $0.0240 level to avoid further losses in the near term.Cardano price declined recently, but the $0.0400 support area acted as a barrier for buyers. ADA price is currently trading above the $0.0420 level and it seems like the price may rise towards the $0.0450 level in the coming sessions.Looking at the total cryptocurrency market cap hourly chart, there was a sharp decline from well above the $138.0B level. The market cap broke the key $128.0B support to enter a bearish zone. It traded towards the $120.0B support level and later started an upside correction. However, there are many resistances on the upside near the $128.0B and $130.0B level. The main supports are at $124.0B and $122.0B. Therefore, if bitcoin, ETH, XRP, tron, bitcoin cash, litecoin, EOS, stellar, IOTA and other altcoins correct higher, they are likely to face a lot of hurdles.
In a recent interview, the renowned female economist Janet Yellen was critical of US President Donald Trump’s economic prowess. Yellen says Trump demonstrates a “lack of understanding” as she prepares to become president-elect of the American Economic Association.
Feminist Hero and “Phenomenon” Yellen Says Powerful Fed is Misunderstood by Donald Trump
In a recent interview with Marketplace Yellen describes the Federal Reserve as powerful and influential but also independent. She believes the understanding of its policies and its own communication of them to the American public is vital. But of Trump’s understanding of macroeconomic policy and the US Federal Reserve’s role she’s scathing.
Question: Do you think the president has a grasp of macroeconomic policy?
— Nick Timiraos (@NickTimiraos) February 25, 2019
He’s made comments about the Fed having an exchange rate objective in order to support his trade plans, or possibly targeting the U.S. balance of trade. And, you know, I think comments like that shows a lack of understanding of the impact of the Fed on the economy and appropriate policy goals.
Yellen outlines the goals of the Fed assigned by Congress as “maximum employment and price stability” but that she doubts Trump “would even be able to say that.”
Question: Do you think the emperor is wearing clothes?
Janet Yellen: No, I do not. https://t.co/WcW6HRWVQl
— Mark Copelovitch (@mcopelov) February 25, 2019
US Economy Doing Well But Growth is Unsustainable
The economist does believe the US economy is doing well but the recent period of economic growth in 2018, which she says is “probably around 3 percent” is not “sustainable.”
Her interviewer questions this as for years 3% growth was normal. Now says Yellen:
We’re in a world of both slow labor force growth and low productivity growth.
A sustainable growth rate would be nearer 2% or less but this slowing doesn’t necessarily mean a recession.
And I don’t believe we will have a recession this year, but of course it is a risk
Yellen does say that “financial conditions have tightened” and, the stock market has fallen back. But, uncertainty itself can be fuelling the risk of a recession.
Financial conditions do matter to the actual outlook, so that linkage is there, that fear that there will be a recession can trigger changes, could bring one on.
Current US Federal Reserve Actions Are Helpful
The ex-Fed chair is evidentially keeping her hand in despite not being reappointed to Fed chair by Trump. She gives a nod to current Fed chair Jerome Powell and the Fed’s recent “reassuring words” and “watchful waiting” are helpful.
It is not locked into some predetermined course, that it’s watching the economy very carefully and will address risks whether they require interest rate increases or cuts.
Yellen does believe the Fed made mistakes in communication during the financial crisis a decade ago. The public thought the Fed was protecting investors and Wall Street. But in fact, the Fed used a “discount window” to protect credit to businesses and households.
It really is important that the public see the Fed as an institution that cares about Main Street.
The economist takes an active part in ensuring the Fed now communicates better with citizens. She says this in itself is a “policy tool.”
I hope the people over at the Fed will read today’s Wall Street Journal Editorial before they make yet another mistake. Also, don’t let the market become any more illiquid than it already is. Stop with the 50 B’s. Feel the market, don’t just go by meaningless numbers. Good luck!
— Donald J. Trump (@realDonaldTrump) December 18, 2018
And of course, the Fed has to battle Trump’s own scathing rhetoric against the independent body when trying to get their economic stance across. Though US Federal Reserve presidents, namely Neel Kashkari, are known to say the body “does not exist to protect investors.” Its wait and see stance in 2019 fuelled a stock market rally. Speculation abounds that now the Fed could cut interest rates in 2020. Janet Yellen believes Donald Trump himself could be driving market uncertainty.
Ripple price rallied sharply above $0.3200 against the US dollar after the Coinbase listing announcement.The price traded above the $0.3220 and $0.3300 resistance levels before it faced sellers near $0.3400.There is a crucial connecting bearish trend line formed with resistance at $0.3360 on the hourly chart of the XRP/USD pair (data source from Kraken).The pair may correct a few points, but dips remain supported above $0.3200.Ripple price climbed higher sharply against the US Dollar and bitcoin after the positive news of Coinbase listing. XRP/USD tested the $0.3400 resistance and it remains supported for more gains.Ripple Price AnalysisRecently, we saw a sharp decline in ripple price below the $0.3200 support area against the US Dollar. The XRP/USD pair broke key supports and moved into a bearish zone similar to Ethereum and bitcoin. It even traded below the $0.3000 support before buyers appeared near $0.2960. Later, the price started trading in a range above $0.2980 for the next break. Finally, there was a solid bullish wave the Coinbase listing announcement. Buyers gained paced and broke many key resistances such as $0.3100, $0.3140, $0.3200 and $0.3220.There was a close above the $0.3200 level and the 100 hourly simple moving average. Besides, the 61.8% Fib retracement level of the last drop from the $0.3420 high to $0.2940 low was breached. The price even broke the $0.3350 resistance and traded close to the $0.3400 resistance. However, there was no follow through above the $0.3385 level and the price failed to test the last high near $0.3420. An intraday high was formed at $0.3388 and the price later corrected lower.It dipped below the 23.6% Fib retracement level of the recent wave from the $0.2961 low to $0.3388 high. However, there are many supports on the downside near the $0.3220 and $0.3200 level. The 50% Fib retracement level of the recent wave from the $0.2961 low to $0.3388 high is also near the $0.3175 level. Therefore, it seems like dips remain supported above $0.3175 in the near term. On the upside, there is a crucial connecting bearish trend line formed with resistance at $0.3360 on the hourly chart of the XRP/USD pair.Looking at the chart, ripple price may continue to struggle near the trend line and $0.3400. If there is a successful daily close above $0.3400, it is likely to trigger more gains above the $0.3450 level.Technical IndicatorsHourly MACD – The MACD for XRP/USD could move back in the bearish zone.Hourly RSI (Relative Strength Index) – The RSI for XRP/USD is currently placed well above the 60 and 65 levels.Major Support Levels – $0.3220, $0.3200 and $0.3175.Major Resistance Levels – $0.3350, $0.3400 and $0.3420.
ETH price corrected a few points after a sharp decline below the $142 support area against the US Dollar.The price corrected above $138, but the previous supports at $141 and $142 prevented gains.There is a short term breakout pattern in place with resistance at $140 on the hourly chart of ETH/USD (data feed via Kraken).The pair must break the $142 resistance and the 100 hourly simple moving average to move into a positive zone.Ethereum price started consolidating losses after a major drop against the US Dollar and bitcoin. ETH/USD remains sell on rallies until it breaks the $142 barrier and the 100 hourly SMA.Ethereum Price AnalysisRecently, we saw a sharp decline in ETH price from well above $165 against the US Dollar. The ETH/USD pair broke many supports such as $155, $150 and $142. It even broke the $136 support and traded near the $130-131 zone. A low was formed near $131 and later the price started correcting higher. It moved above the $135 and $136 levels and later started consolidating losses. Buyers pushed the price towards the 23.6% Fib retracement level of the recent drop from the $166 high to $131 low.However, the $141 and $142 levels acted as a strong resistance. At the outset, it seems like there is a short term breakout pattern in place with resistance at $140 on the hourly chart of ETH/USD. On the upside, the pair needs to clear the triangle resistance and the $142 level. The main resistance is near the $144 level and the 100 hourly simple moving average. If buyers succeed in clearing the 100 hourly SMA and $144, there could be more gains. The next key resistance is near the $149 level. It represents the 50% Fib retracement level of the recent drop from the $166 high to $131 low.On the other hand, if there is no upside break above $144, the price could decline further. A break below the $136 support may push the price towards the $132 level. Finally, a break below the recent swing low will most likely push the price below $130.Looking at the chart, ETH price might continue to struggle near the $141, $142 and $144 resistance levels. However, if there is a successful close above $144 and the 100 hourly SMA, buyers could gain momentum in the near term.ETH Technical IndicatorsHourly MACD – The MACD for ETH/USD is slightly placed in the bullish zone, with no major bullish signal.Hourly RSI – The RSI for ETH/USD is currently just around the 50 level, with a flat structure and neutral bias.Major Support Level – $132Major Resistance Level – $142
The past 14 months have been arduous for Bitcoin and the cryptocurrency markets in general, and investors that have held through the market crash are increasingly wondering as to when, and if, their crypto investments will ever be able to surge back towards their previously established all-time-highs.Although uncertainty has swept across the markets, there are multiple pieces of evidence that may point towards the possibility that Bitcoin is nearing the end of what has become the longest-ever bear market in its relatively short history.Analyst: Bitcoin (BTC) May be Forming Technical Bottom Over the past couple of weeks Bitcoin has been able to continue respecting the low-$3,000 region as a strong level of support, finding buying pressure each time this price level is touched. Because BTC has been able to maintain above its 2018 lows, many analysts are beginning to believe that this price level could be a long-term bottom.Alex Krüger, an economist who focuses primarily on cryptocurrencies, discussed the possibility of Bitcoin beginning to reverse its bear trend, noting that it currently has all the components of a bottom.“The $BTC chart has all the components of a bottom… Capitulation (Nov-Dec)… Bounced off long term trend measure, twice, on Dec & Feb (200 WMA)… Broke out from Higher Low in high volume (Now)… A flush down on the last push lower would have increased bottom odds,” he explained.2/ The $BTC chart has all the components of a bottom.– Capitulation (Nov-Dec)
– Bounced off long term trend measure, twice, on Dec & Feb (200 WMA)
– Broke out from Higher Low in high volume (Now)A flush down on the last push lower would have increased bottom odds. pic.twitter.com/DIv5gX36wW— Alex Krüger (@krugermacro) February 20, 2019Furthermore, Krüger said that Bitcoin will eventually push up to fill the gap that exists up to roughly $7,000, and also noted that this push could occur with or without any sort of fundamental catalyst.“A strong move up to fill in the gap above is a matter of when not if. Such move up can happen entirely on technicals i.e. it does not need a fundamentals catalyst nor a change in market structure.”3/ A strong move up to fill in the gap above is a matter of when not if. Such move up can happen entirely on technicals i.e. it does not need a fundamentals catalyst nor a change in market structure. pic.twitter.com/0IlPxK4uyN— Alex Krüger (@krugermacro) February 20, 2019Bitcoin (BTC) is Also Finding Increased Fundamental StrengthIn addition to possibly garnering increased strength from a technical perspective, Bitcoin is also seeing an increased amount of catalysts that could potentially help lead to an upwards price surge.Krüger further added that there are a multitude of positive developments in the cryptocurrency space that signal growing adoption. Some of these developments he points to are Fidelity Investment’s upcoming platform for institutional investors interested in cryptocurrency, Bakkt possibly launching in March, and Lightning coming to Square’s Cash App.7/
– Lightning coming to Square’s Cash App
– Binance accepting credit cards
– Binance fiat onramp
– Mt Gox rebirth
– Facebook exploring crypto
– Bakkt possibly coming in March
– New platforrms/apps (Dharma, Abra, etc)
– Fidelity launching service for institutional investors— Alex Krüger (@krugermacro) February 20, 2019When looking at the present technical strength of BTC as well as its growing fundamental strength via increased corporate and institutional adoption, it does appear to only be a matter of time before Bitcoin pulls itself out of the current bear market and begins a new journey towards its previously established all-time-highs.Krüger summarized his comprehensive thread regarding the current state of Bitcoin on a cautiously optimistic note, explaining that although it appears that BTC has in fact found a long-term bottom, dwindling interest in the cryptocurrency space does leave room for further downside.“TL;DR – Short term longs above 3550, 3700 key level below (buy), 4200 key level above. Charts scream bottom, yet regardless of any bullish developments, interest in the space is still minimal. If price turns south of 3550 a new low becomes likely. The future is path dependent.”11/ TL;DRShort term longs above 3550, 3700 key level below (buy), 4200 key level above. Charts scream bottom, yet regardless of any bullish developments, interest in the space is still minimal. If price turns south of 3550 a new low becomes likely. The future is path dependent.— Alex Krüger (@krugermacro) February 20, 2019Investors, traders, and cryptocurrency advocates alike will likely soon gain greater insight into whether or not the markets will recognize the plethora of positive developments that have occurred over the past year, despite the persisting bear market.Featured image from Shutterstock.
Over the weekend, a strong rally was stifled by an even stronger rejection as the bitcoin market was shoved into a band of overhanging resistance. This band of resistance has been mentioned several times in our analyses over the last few weeks as it has proven impossible to overcome for the time being:
Figure 1: BTC-USD, Daily Candles, Failed Breakout
This run to the low $4,000s coincided with a breakout of a rather large symmetrical triangle consolidation shown above. It managed to establish a new, local high but was immediately rejected on high volume and very high spread. This rejection formed a candle called a “bearish engulfing candle” that completely wiped out a week and a half’s worth of gains in just a couple hours.
This rejection should not be underestimated as it represents a failed consolidation. Patterns that break out and see 100% retracements to the breakout point often are signs of a potentially strong market reversal. In our case, it would be a reversal of our local uptrend.
This rally represents a third failure to break our bearish market structure and likely means we will be visiting the low $3,000s to test support/demand once again. Sitting just below our current market low is a strong, macro support level that could see a test if the demand is weak:
Figure 2: BTC-USD, Weekly Candles, Macro Support Level
A test of the zone between $2,900 and $3,100 almost seems inevitable, given the amount of failed rallies and constant supply surfacing in the low $4,000s. However, if we manage to continue the uptrend, the milestone we must keep an eye out for is a daily close above the $4,250 level shown in Figure 1. A close above that level will represent the first higher high since we bottomed at $3,100.
For now, the market structure remains bearish as we continue the trend of lower highs. The rallies are becoming weaker and the supply is drowning the remaining demand toward the top of our trading range:
Figure 3: BTC-USD, Daily Candles, High Volume Rejections
When looking at the health of these rallies, it becomes apparent that the efforts vs. results of the rallies are lopsided. We see a high amount of effort by the bulls to move the price and a relatively low amount of effort from the bears to wipe out days’ worth of progress.
If we manage to retest the bottom of the trading range, we will gather more evidence as the market tests the strength of the demand. For now, it appears the bulls are running out of steam. As mentioned earlier, if we manage to continue the uptrend, keep an eye out for the $4,250 level, as a close above it will show a break in the currently bearish market structure.
- Over the weekend, a strong round of selling wiped out a week and a half’s worth of buying pressure.
- The selling coincided with a failed symmetrical triangle breakout — this often leads to power market reversals.
- Bullish pressure seems to be waning as every attempted rally is quickly dispatched by strong bearish pressure.
Trading and investing in digital assets like bitcoin is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Inc related sites do not necessarily reflect the opinion of BTC Inc and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.
Donald Trump sent the oil market into a tailspin Monday with one tweet claiming oil prices are too high and blaming OPEC for it. Is Trump unaware that oil prices are a function of supply and demand? Or is he deliberately shifting the blame off his destructive embargo of Venezuela?
Oil prices getting too high. OPEC, please relax and take it easy. World cannot take a price hike – fragile!
— Donald J. Trump (@realDonaldTrump) February 25, 2019
Though it is a fact that oil prices are at a three month high, “Oil prices are getting too high,” is merely Donald Trump’s opinion.
And calling the world “fragile” and suggesting higher oil prices would be some kind of catastrophe is an alarmist narrative.
Trump is Being a Drama Queen About Oil Prices
Trump’s overly-dramatic tweet fits in nicely with the Goldman Sachs report from earlier today predicting that Brent Crude oil will go even higher to $75/bbl before the end of the year.
But trying to scare up a panic over oil prices is a cry for attention from the sitting president, one that fits in with his television persona as a tough world negotiator.
That Goldman Sachs report also said the $70-$75/bbl trading range would be temporary:
“‘While prices could easily trade in a $70-$75/bbl trading range, we believe such an environment would likely prove ﬂeeting,’ according to Goldman’s global head of commodities research Jeffrey Currie and senior commodity strategist Damien Courvalin.”
And oil prices are determined by supply and demand. So they’re not “too high,” as Donald Trump avers. They’re at the level that reflects supply and demand.
Oil Prices are Higher Because of Involuntary Supply Curbs in Libya and Nigeria
One reason oil prices are higher is because of involuntary supply curbs in socially and politically unstable Libya and Nigeria.
In Libya, the National Oil Corporation refuses to start production in the Sharara oil field, the North African country’s biggest.
The facilities were recently seized by a Libyan militia group, and the oil company’s chairman says the militia has “committed violent and terrorizing acts against workers.”
In Nigeria, contentious political elections underway now have dampened the country’s oil production. Western military interventions have destabilized both countries.
Libya and Nigeria Are Both Obama and Clinton’s Fault
That includes a bill signed by President Obama in 2016 to station U.S. military boots on the ground in Nigeria, stirring up more armed conflict there.
It also includes the Obama administration’s 2011 regime change intervention in Libya, backed by British and French intelligence, as well as U.S. air power.
The result was an unmitigated catastrophe of violent civil disorder, warring factions, and a deluge of new terrorist recruitment, training, and planning in the power vacuum left by the relatively stable, secular government of Muammar Gaddafi.
What makes the intervention in Libya all the more baffling is what a close partner Gaddafi had been with both the Bush and Obama administrations in the Global War on Terror/Overseas Contingency Operation after 9-11.
So the previous administration and both major political parties in Washington deserve their share of the blame for the 300,000 barrels a day that aren’t pumping through Sharara.
Venezuela is Trump and Bolton’s Fault
Oil prices are also higher than they would have been otherwise as a result of Donald Trump’s own half-baked geopolitical interventions as president of the United States.
In a research note Monday, Goldman Sachs said the disruption in oil supply from Trump’s embargo on Venezuela is likely to reach as high as 300,000 bbl/d in the coming months:
“While the decline in net exports has been softened so far by the use of domestic light crude for blending, we believe Venezuelan disruptions are likely to accelerate in coming months to potentially 200-300 kb/d if no political resolution occurs.”
At today’s OPEC Reference Basket price of $66/bbl, that’s $6.8 billion worth of oil annually that Donald Trump is personally responsible for keeping stuck in Venezuela.
So if the world is really so fragile that it can’t take an oil price hike, then instead of telling OPEC to loosen up and take it easy, Donald Trump should take it easy on Venezuela.
Donald Trump Image from AFP PHOTO / JIM WATSON
According to an official statement published on February 25, 2019, Bitfinex has revealed that the United States government returned 27.7 BTC (worth about $105,000 USD) to the exchange, as part of restitution for a hack that was effected on the exchange back in 2016.
The returned tokens represent just 0.023 percent of the bitcoin stolen in the infamous 2016 hack.
Bitfinex said that U.S. federal law enforcement informed them in November of last year that it had obtained access to the stolen funds.
Bitfinex CFO Giancarlo Devasini was full of praise for the efforts of law enforcement officers in the recovery, stating:
Over two years following the hack of the Bitfinex platform, today we see the results of a clear and robust response strategy and the efforts of the U.S. government. It gives us great pleasure to be able to reimburse our traders that were loyal to us and believed in us at a very difficult time.
Devasini also reiterated the exchange’s willingness to help investigators in their inquiries, calling on individuals with useful information about the hack to reach out so they can “finally resolve the situation in a mutually beneficial manner.”
The Hack and Bitfinex’s Retrieval Efforts
The exchange had generalized the losses across all accounts, crediting BFX tokens for every dollar lost in the hack. Tokens were redeemed for a dollar or exchanged for the company’s stocks — those who chose to hold shares had their BFX tokens converted into Recovery Right Tokens (RRT).
Per the announcement, the recovered tokens are currently being converted to USD and will be paid to holders of RRT.
“The benefit to RRT holders is that in the event of any retrieval of the stolen property, and after any outstanding or unconverted BFX token holders have been reimbursed, recovered funds are distributed to RRT holders, up to 1 dollar per RRT,” the statement reads.
The bitcoin price started Monday with a small recovery to compensate for Sunday’s massive losses, but crypto investors shouldn’t get their hopes up.
Bitcoin (BTC/USD) established its intraday high at $3,861, up around 1 percent for the 24-hour period. On Sunday, the pair dropped approximately 10 percent in just 9 hours – a dump, precisely. It started consolidating upwards after finding a new low at $3,721. At the same time, the bitcoin market reported lower intraday volume and volatility, indicating that the bearish action was still far from over.
Bitcoin Price Faces Stiff Resistance above $4,200
In late November 2018, the bitcoin price had broken below its so-called bottom area at $6,000. The cryptocurrency attempted its first strong upside correction on November 23 when it recovered from $3,453 to $4,419. However, it failed to extend its bullish momentum every time it came near a specific resistance area. Have a look at the daily chart below for illustration.
Since the first upside attempt, BTC/USD has attempted to cross above the resistance area on five separate occasions. At the same time, we can see how the 50-period moving average (depicted in the blue curve above) has also capped bullish attempts. Recently, bitcoin broke above that moving average to establish an interim bullish bias. Nevertheless, the pair met the “resistance area” that prevented the rally from extending any further.
Upon the bearish divergence action from the area, bitcoin moved back towards the 50-period EMA. Surprisingly, the blue curve switched from being resistance to being support. We can see the two daily candles in the end in the chart above supported by the 50-period EMA. We can expect it to hold the downside action for a while.
At the same time, if bitcoin breaks below the 50-period EMA, then the cryptocurrency could target $3,551 as the next potential support.
Bitcoin Forming Bear Flag
Bitcoin is now in the first wave of a potential downside move, as evidenced by the formation of a bear flag. While there is a possibility that the price will reverse back towards the “resistance area” – as mentioned in the section above – the overall sentiment and the price action in recent months indicate that bitcoin is due for an extended bear run.
A breakdown action from where bitcoin is right now would be confirmed once the price tests the so-called flag support. At the same time, traders would see a rise in volume. It could pose as an excellent opportunity for short traders, with a potential initial downside target towards $3,551. Adventurous traders could also be eyeing the support trendline of medium-term triangle formation (depicted via a rising red trendline).
Traders Should Press Pause on Intraday Bitcoin Price Strategy
We are not yet sure about how we would like to play the market. There is a clear bias conflict concerning the direction of the next price action. Consequently, our priority should be to wait and confirm a breakout/breakdown to understand the extent of our positions. Overall, going by the look of bitcoin performance in the past 24 hours, we don’t expect the ongoing bullish correction to continue.
Featured Image from Shutterstock. Price Charts from TradingView.