Bitcoin Making Little Headway as Resistance Caps Price Gains

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  • Bitcoin is struggling to cross the 50-day moving average hurdle for the fifth straight day. The repeated failure at that key hurdle has neutralized the bullish outlook put forward by Friday’s falling wedge breakout.
  • A convincing move above $3,630 (50-day MA) would revive the short-term bullish outlook and open the doors to $3,730 – the neckline of a potential inverse head-and-shoulders bullish reversal pattern on the 4-hour chart. A violation there would confirm a bearish-to-bullish trend change and could yield a rally to $4,130 (target as per the measured move method).
  • The bears could make a comeback if the 50-day MA hurdle remains intact for another 24 hours, pushing prices below $3,400.
Bitcoin’s struggle to cross a key moving average lined up above $3,600 is a cause of concern for the bulls. The leading cryptocurrency by market capitalization is currently trading at $3,575 on Bitstamp, having faced rejection at the widely followed 50-day moving average (MA) hurdle at $3,629 earlier today. Notably, that average line has been capping upside since Friday, countering expectations of a quick move toward $4,000 built following the high-volume falling wedge breakout. The sideways action below the 50-day MA has also invalidated the bull flag pattern created on the 4-hour chart over the last three days. So, the bullish case appears to have weakened and the probability of a drop to levels below $3,400 would rise if the 50-day MA hurdle remains intact for another 24 hours.

Daily chart

As seen above, the odds are stacked in favor of the bulls: the 5- and 10-day MAs are trending north, validating the falling wedge breakout. The 14-day RSI is reporting bullish conditions above 50.00. Even so, BTC is struggling to find acceptance above the 50-day MA, currently at $3,629. As a result, the bears may feel tempted to hit the market with fresh offers, driving the prices down to the ascending 10-day MA at $3,521. It is worth noting that the 50-day MA had worked as stiff resistance multiple times in the second half of the last month. As a result, a convincing move above that average is needed to revive the short-term bullish outlook.

4-hour chart

BTC is likely creating the right shoulder of an inverse head-and-shoulders pattern on the 4-hour chart. A break above the neckline resistance, currently at $3,730, would confirm a bullish breakout and could be followed by a move higher to $4,130 (target as per the measured move method). So, while a break above the 50-day MA would revive the bullish outlook, only an acceptance above the neckline hurdle of $3,730 would put $4,000 back on the table. Disclosure: The author holds no cryptocurrency assets at the time of writing. Source: www.coindesk.com

Little Relief in Sight as Bitcoin Price Closes at 7.5-Week Low

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  • Bitcoin suffered its lowest UTC close in over seven weeks on Wednesday, reinforcing the bearish view put forward by the rejection at the 50-candle moving average (MA) on the 6-hour chart yesterday. The close at multi-week lows also dashed hopes of a falling wedge breakout.
  • The cryptocurrency also created a bearish outside reversal candle on the daily chart yesterday, opening the doors for a drop to falling channel support at $3,230.
  • A strong move above the 50-candle moving average on the 6-hour chart, currently at $3,434 will likely weaken bearish pressures and yield a corrective bounce to the resistance near $3,650.
With bitcoin (BTC) closing yesterday at the lowest level in 7.5 weeks, the gradual sell-off is showing no signs of abating. On Wednesday, the leading cryptocurrency by market value ended the session (as per UTC) at $3,328 – the weakest daily close since Dec. 16 – according to Bitstamp data, dashing hopes of an upside break of the falling wedge pattern carved out over the last six weeks. Further, BTC created a bearish lower high at the crucial resistance of the 50-candle moving average (MA) on the 6-hour chart. That average line has thwarted several fledgling rallies over the last three weeks, as discussed yesterday. As a result, the slow drip sell-off from December highs above $4,200 witnessed over the last six weeks is likely to continue. BTC could soon challenge recent lows near $3,300 and may extend the decline toward the low of $3,100 seen in December. At press time, BTC is trading largely unchanged on the day at $3,380.

Daily chart

As seen above, yesterday’s high and low engulfed Tuesday’s price action as indicated by a bearish outside candle. Effectively, the day began with optimism but ended on a pessimistic note, meaning the “sell-on-rise” mentality is still strong. Hence, the cryptocurrency risks falling to the descending channel support, currently at $3,230. Supporting that bearish case are the 14-day relative strength index of 38 and downward sloping 20-day moving average (MA).

6-hour chart

On the 6-hour chart, the 50-candle MA has proved a tough nut to crack for close to three weeks. A convincing break above that average, currently at $3,434, might lead to a stronger rally toward resistance at $3,658 (high of the bearish gravestone doji created Jan. 26). Disclosure: The author holds no cryptocurrency assets at the time of writing. Source: www.coindesk.com

Down Again: Bitcoin Is Closing on Key Long-Term Price Support

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  • Bitcoin is again closing on the 200-week moving average, which served as strong support in December. The weekly RSI is more bearish this time round, though, and is reporting undersold conditions.
  • A weekly close below that level could be followed by a slide back to September 2017 lows near $2,970.
  • A failure to push prices below the 200-week SMA support would weaken the bears. A bullish reversal, however, would be confirmed only above $3,658 – the high of gravestone doji carved out Saturday.
Bitcoin (BTC) is on the defensive after a drop to six-week lows and could soon test crucial long-term support below $3,300. The cryptocurrency fell to $3,322 – the lowest level since Dec. 17 earlier today – bolstering the bearish view put forward by Monday’s high-volume range breakdown. Trading volumes jumped to 18-day highs near $7 billion yesterday, according to CoinMarketCap data. The high-volume sell-off has likely opened the doors to re-test of December lows near $3,100. Moreover, the long-term support level put the brakes on a sell-off back in December, and was followed by a corrective bounce to levels above $4,000. A strong bounce from the 200-week SMA line would likely embolden the bulls, but the probability of a bull reversal from that SMA support looks low, according to technical indicators. As of writing, BTC is trading at $3,380 on Bitstamp, representing a 1.5 percent drop on a 24-hour basis.

Weekly chart

As seen above, BTC is again trading within striking distance of the 200-week SMA of $3,298. The support had held ground on a weekly closing basis (Sunday, UTC) in mid-December, possibly because the relative strength index (RSI) was reporting oversold conditions at the time. This time, however, the SMA support could be breached, as the RSI is currently in undersold territory.

Daily chart

The RSI on the daily chart is also biased toward the bears, as opposed to the record oversold conditions seen in November and December. The 5- and 10-day moving averages (MAs) are also trending south, indicating a bearish setup. Hence, a drop to the December low of $3,122 could be on the cards.

4-hour and hourly chart

The RSIs on the 4-hour and hourly charts are reporting oversold conditions below 30.00. Therefore, a convincing break below the 200-week SMA of $3,298 could be preceded by a minor bounce. Disclosure: The author holds no cryptocurrency at the time of writing. Source: www.coindesk.com

Bitcoin Price Looks South After Drop to Six-Week Lows

Bitcoin ended a two-week period of consolidation with a drop to six-week lows earlier today. The leading cryptocurrency by market value fell below $3,470 at 04:45 UTC, confirming a downside break of a triangle pattern. That range breakdown was followed by a quick slide to $3,357 – the lowest level since Dec. 17 – according to Bitstamp data. A prolonged period of consolidation usually yields a big move in the direction of the breakout. For instance, BTC ended a multi-week-long trading range with a move below $6,000 on Nov. 14 and what followed was a violent sell-off to levels below $4,000. However, the duration of the recent consolidation was shorter than the one seen before the big bearish move of Nov. 14. So, the magnitude of any post-breakdown move would likely be smaller too. Nevertheless, the latest range breakdown could at least yield re-test of December lows near $3,100, as the primary trend represented by the downward sloping 10-week moving average (MA) is negative. The bearish case looks even stronger if we take into account the bull failure seen over the weekend. Prices had turned in favor of the bulls with a move to $3,658 on Saturday. That triangle breakout, however, petered out, with prices falling back to $3,500 yesterday. A failed breakout is widely considered a strong bearish signal. Possibly adding extra downward pressure on prices, safe-haven asset gold – which has been inversely correlated with BTC since November – found acceptance above $1,300 on Friday. At the time of writing, BTC is changing hands at $3,430, representing a 3 percent drop on a 24-hour basis.

Daily chart

On the daily chart, BTC charted a bearish gravestone doji on Saturday, meaning the day began with a positive move but ended flat on the day. Adding to the bulls’ woes is the negative follow-through as represented by the drop to six-week lows today. The 14-day relative strength index (RSI) is also reporting a range breakdown below 40.00. So, the path of least resistance looks to be to on the downside, and the bulls will likely feel emboldened only above $3,658 (the high of the gravestone doji).

4-hour chart

As seen in the above chart, BTC’s triangle breakout on Saturday was short-lived and the cryptocurrency has now found acceptance under the lower edge of the triangle. The chart also shows a Bollinger Band breakdown, with a convincing break below the lower band. The RSI, however, is reporting oversold conditions. As a result, BTC may revisit $3,500 before resuming the drop toward the December lows.

Weekly chart

The 10-week MA is still trending south, indicating a bearish setup. There are, however, signs of indecision in the marketplace, as represented by last week’s classic doji candle. Further, a sustained drop in trading volumes likely indicates bearish exhaustion. The outlook, therefore, would turn bullish if BTC ends this week above the doji candle high of $3,658.

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  • BTC risks falling to the December low of $3,122 in the next few days, having confirmed a range breakdown with a drop to six-week lows today.
  • A downward move could be preceded by a minor bounce to $3,500, as the RSIs on the 4-hour and the hourly chart are reporting oversold conditions.
  • The outlook would turn bullish if the oversold conditions on the 4-hour RSI end up yielding a convincing move above $3,658 (the high of both the gravestone doji and the classic doji).
Disclosure: The author holds no cryptocurrency at the time of writing. Source: www.coindesk.com

Gold Price May Offer Clues About Next Big Bitcoin Move

Bitcoin (BTC) traders could get cues from an apparent negative correlation that has developed between bitcoin and gold prices. Gold picked up a strong bid at $1,196 on Nov. 13 and jumped to $1,300 on Jan. 4, possibly due to a sell-off in the weakening U.S. dollar. The greenback was down against most currencies in last two months of 2018 on growing speculation that the Federal Reserve (Fed) could decrease or pause interest rate hikes in 2019. Bitcoin, however, did not benefit from that broad-based sell-off in the dollar. The cryptocurrency instead saw a revived bear market with a convincing move below $6,000 on Nov. 14 – a day after gold found takers around $1,200 per ounce. That price action indicates that the two assets are inversely correlated. Validating that argument is the 90-day correlation coefficient of -0.593. The statistical measure ranges from -1 to 1, with a negative number representing the inverse relationship between the two variables, while a positive number implies direct correlation. As a result, the leading cryptocurrency by market value could be influenced by the next move in gold prices. Currently, the safe haven metal is trading at $1,285, having hit a three-week low of $1,276 earlier this week. Meanwhile, BTC is trading in a narrow range above $3,500 for the 13th straight day. The prolongedperiod of consolidation could end with a strong bullish move if the corrective pullback in gold worsens. It is worth noting that correlation is not causation and only describes the relative change in one variable when there is a change in another.

Bitcoin and gold chart

As seen above, bitcoin and gold have moved in opposite directions since late November. Gold rallied 8.33 percent in seven weeks leading up to Jan. 4. During the same time, BTC depreciated by 50 percent. Further, gold’s repeated failure at $1,300 has established that psychological level as a stiff near-term resistance. Meanwhile, BTC has defended $3,500 since Jan. 11. The cryptocurrency could see a strong bullish move if the pullback in the yellow metal gathers steam.

Bitcoin daily chart

On the daily chart, BTC created a “long-tailed” candle at the crucial support of $3,500, signaling bearish exhaustion. A positive follow-through – that is, a convincing move above $3,615 (Tuesday’s low) – would confirm bullish bias.

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  • Bitcoin and gold look to be inversely correlated and sustained weakness in gold could bode well for BTC going forward.
  • As far as technicals are concerned, the immediate bias remains bearish, as indicated by the downward sloping 10-week MA. The prospects of a break higher toward $4,000 would improve if prices close today (as per UTC) above $3,615.
Disclosure: The author holds no cryptocurrency assets at the time of writing. Source: www.coindesk.com

Bitcoin Sees Longest Stretch of Price Consolidation Since October

Bitcoin (BTC) is witnessing the longest stretch of range-bound price activity in three months. The leading cryptocurrency by market capitalization has been largely restricted to trading between $3,700 and $3,500 since Jan. 11 – the longest stretch at such a narrow range since the end of October. Back then, the market had gone quiet, with prices staying within the $6,500–$6,350 range in the 12 days leading up to Oct. 28. On the following day, BTC dropped to $6,208. After another period of sideways movement, bitcoin fell well below the crucial support level of $6,000 on Nov. 14. The current period of consolidation may also end with a big move to the downside, as BTC reinforced the primary bearish trend – as represented by the downward sloping 10-week moving average – with a 10 percent slide on Jan. 10. The potential post-breakdown drop toward December lows near $3,100 could be rapid, too, as a prolonged period of consolidation often ends with a violent move. As of writing, the cryptocurrency is trading at $3,515 on Bitstamp, representing a 0.40 percent drop on a 24-hour basis.

Daily chart

As seen above, BTC’s 12-day-long range play is the longest since Oct. 28. Back then, Bollinger bands (standard deviation of +2,-2 on the 20-day moving average) were flat-lined, representing a neutral bias. As of now, Bollinger bands are signaling a bearish bias with a slight tilt to the downside. Another major difference is that prices had consolidated around the 20-day MA in October. This time, however, the moving average is working as stiff resistance, as indicated by BTC’s failure to secure a UTC close above that level on Jan. 19.

Weekly chart

The outlook remains bearish while BTC is held below the downward sloping 10-week moving average (MA), currently at $3,715. The long upper shadow (spread between high and close) attached to the previous weekly candle indicates that the “sell-on-rise” mentality is still intact, meaning the brief price bounce soon ran into offers. That candle also confirmed the end of a corrective bounce from December lows signaled by the preceding bearish engulfing candle.

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  • Bitcoin’s longest stretch of price consolidation will likely end with a convincing break below $3,500 and could be followed by a re-test of the December low of $3,122.
  • The bearish case would weaken if the cryptocurrency sees a UTC close above the former-support-turned resistance of the 21-day MA, currently at $3,732.
Disclosure: The author holds no cryptocurrency assets at the time of writing. Source: www.coindesk.com

South Korean Exchange Loses $5 Million in Accidental Bitcoin Airdrop

South Korean crypto exchange Coinnest is looking to take back cryptocurrencies accidentally sent to clients in an airdrop. The exchange announced last week that some 6 billion Korean won (around $5.3 million) in bitcoin and other cryptocurrencies were sent to customers due to a computer error, according to CoinDesk Korea. The exchange was trying to airdrop We Game Tokens (WGT) when the incident occurred. Further, due to the server issue, some customers also received Korean won from the exchange. The exchange has no plans to compensate users for any losses suffered through its server issues. Coinnest’s server issues were resolved by Jan. 19, and the company plans to roll back transactions to restore its assets. It has also asked customers to return funds they received by mistake. As of Jan. 19, about half of the won was returned. Some traders who received bitcoin instead of WGT reportedly sold their new holdings immediately, causing bitcoin’s price to flash-crash to $50. Coinnest has found itself embroiled in controversy before. Last year, CEO Kim Ik-hwan was reportedly detained by South Korean police on concerns that he was embezzling funds from the exchange. Prosecutors had already raided the exchange, though it is unclear if any confirmation of embezzlement was found.

Source: www.coindesk.com

This Former Bitcoin Price Support Is Now Capping Gains

Bitcoin’s (BTC) weekly gains were wiped out at the weekend at a key moving average that previously offered support. The leading cryptocurrency by market capitalization jumped to highs above $6,750 on Saturday, having weakened the immediate bearish case with a repeated defense of the psychological support level of $3,500 last week. BTC, however, failed to secure a UTC close above the 21-day MA. More importantly, rejection at that MA hurdle proved costly – BTC fell 3.8 percent to $3,470 yesterday. So, it could be argued that the MA line, which served as strong support in the two weeks leading up to Jan. 10, has now taken on the role of stiff resistance. As of writing, BTC is changing hands at $3,527 on Bitstamp, representing a 4.30 percent drop on a 24-hour basis. Meanwhile, the 21-day MA is seen at $3,732. The strong pullback from the 21-day MA indicates that the “sell on rise” mentality is still quite strong. After all, the primary trend is still bearish, as represented by the downward sloping 10-week moving average (MA). The probability of a sustained break below $3,500 remains high while BTC is held below the newfound resistance of the 21-day MA.

Daily chart

As seen above, BTC failed at the 21-day MA on Saturday and fell back to $3,500, reinforcing the bearish view put forward by the downward sloping 5- and 10-day exponential moving averages (EMAs) and the 14-day relative strength index (RSI) of 42.00. As a result, the probability of a drop below $3,500 has increased. That would only bolster the bearish technical setup and open the doors to December lows near $3,100. However, the bearish case would weaken if BTC secures a UTC close above the 21-month MA of $3,732.

Weekly chart

The long upper shadow (spread between high and close) attached to last week’s candle represents the “sell on rise” trader mentality – after a quick rise, a selloff erased the gains. The primary trend remains bearish as long as BTC is trading below the downward sloping 10-week MA.

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  • BTC’s pullback from the 21-day MA may embolden the bears to push prices below $3,500. Acceptance below that level would expose the December low of $3,122.
  • A convincing move above the 21-day MA of $3,732 would weaken the bearish case and open up upside towards $4,000. However, the primary trend is bearish, so forcing a move above the 21-day MA could be a tough task for the bulls.
Disclosure: The author holds no cryptocurrency assets at the time of writing. Source: www.coindesk.com

Will Bitcoin’s Price Extend Its Four-Year January Losing Streak?

Bitcoin (BTC) has reported losses in January for the last four years, and a fifth now looks on the cards. The leading cryptocurrency by market value fell 32 percent, 14.6 percent, 0.10 percent and 26.64 percent in the first month of 2015, 2016, 2017 and 2018, respectively, according to CoinDesk’s Bitcoin Price Index. Notably, the odds are stacked in favor of BTC extending the four-year January losing streak this year. BTC fell 13 percent last week, signaling an end of the corrective bounce from the December low of $3,122. The sell-off reinforced the bearish view put forward by the downward sloping 10-week simple moving average. As a result, a drop to $3,122 in the next couple of weeks cannot be ruled out. That said, the probability of BTC beating the trend this month would rise if the former support-turned-resistance of the 21-day moving average (MA), currently at $3,768, is convincingly scaled in the next few days.  A breach there would strengthen the short-term bullish case. As seen above, BTC’s 32 percent drop in January 2015 marked an end of the four-year January winning streak. As of writing, BTC is changing hands at $3,611 – down 2 percent from the monthly opening price of $3,689.

3-day chart

As seen above, BTC failed to cut through the 21-candle MA earlier this month, strengthening the bearish view put forward by the downward sloping line. Further, the drop to $3,476 (Jan. 13 low) invalidated the bullish trend change signaled by an outside reversal candle on Dec 20. As a result, the path of least resistance looks to be to the downside.

Daily chart

The 21-candle MA on the daily chart acted as strong support on multiple occasions before it was breached on Jan. 10. The bearish pressure would weaken somewhat if prices cross back above the 21-candle MA, currently at $3,768, in the next day or two. That would boost the prospects of BTC closing above the monthly opening price of $3,689 on Jan. 31.

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  • The odds of BTC extending its four-year January losing streak appear high currently.
  • BTC risks falling to $3,122 in the near-term, having validated the bearish 10-week MA with a 13 percent drop last week.
  • BTC may snap the four-year January losing streak if prices weaken the immediate bearish pressures with a move above the 21-day SMA in the next couple of days.
Disclosure: The author holds no cryptocurrency assets at the time of writing. Source: www.coindesk.com

This Price Resistance Level May Hold Key to Bitcoin Bull Market

That bitcoin (BTC) may be closing on a long-term bottom is generally accepted by now. After all, the leading cryptocurrency by market value has dropped by close to 70 percent over the last 13 months. The challenge now is to pick up early signs of a long-term bearish-to-bullish trend change, which may be possible with the help of the 10-week simple moving average (SMA). Acting as resistance, that moving average proved a tough nut to crack in the eight weeks to Nov. 14 – the day BTC reentered the bear market with a big drop below $6,000. Further, BTC has charted bearish-lower highs above the 10-week SMA in the last 13 months. Hence, acceptance above that hurdle could be considered a sign that the process of bearish-to-bullish trend change has begun. As of writing, BTC is trading at $3,630 on Bitstamp, representing a 2.5 percent gain on a 24-hour basis. Meanwhile, the 10-week SMA is located at $3,919. It is worth noting that a full confirmation of a longer-term bullish reversal would be a convincing break above the former support-turned-resistance of the 21-month exponential moving average (EMA), currently at $5,400.

Weekly chart

As seen above, BTC repeatedly failed to cross the 10-week SMA on a weekly closing basis (Sunday’s, as per UTC) before falling below $6,000 on Nov. 14. Prior to that, BTC did cross the 10-week SMA in the last week of both February and April, the third week of July and in the last week of August. These bullish breakouts, however, were short-lived: BTC fell back below the 10-week SMA in the following two weeks, trapping the bulls on the wrong side of the market (marked by arrows). Put simply, the cryptocurrency has struggled to breach the 10-week SMA throughout the ongoing bear market. As a result, only a sustained break above the 10-week SMA (at least four weekly candles above the average) would imply bullish reversal. The outlook remains bearish as long as prices are trading below the downward sloping 10-week SMA of $3,919.

Daily chart

BTC closed back above $3,566 (Dec. 27 low) yesterday, establishing a sideways channel on the daily chart. With the weekly chart still biased toward the bears, the lower end of the channel, currently at $3,465, could be breached soon. A channel breakdown, if confirmed, would boost the prospects of a drop to the December low of $3,122.

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  • A sustained break above the 10-week SMA could be considered an early sign of long-term bullish reversal, although prospects of a near-term move above that average look bleak.
  • A channel breakdown on the daily chart would bolster the bearish setup and allow a test of demand around the December low of $3,122.
 Disclosure: The author holds no cryptocurrency assets at the time of writing. Source: www.coindesk.com