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Bitcoin price is consolidating losses above the $3,560 support area against the US Dollar.
There is a short term contracting triangle formed with resistance at $3,625 on the hourly chart of the BTC/USD pair (data feed from Kraken).
The price may soon make the next move either above $3,650 or below $3,540 in the near term.
Bitcoin price is preparing for the next key break above $3,650 against the US Dollar. A close above $3,650 could trigger bullish moves towards $3,720 and $3,800.
Bitcoin Price Analysis
After trading above the $3,700 level, bitcoin price faced renewed selling pressure against the US Dollar. More importantly, Ethereum’s bearish reaction sparked a downward move below $3,650 in the BTC/USD pair. It declined below the $3,620 support and the 100 hourly simple moving average. Besides, there was a break below the 23.6% Fib retracement level of the last wave from the $3,376 low to $3,716 high. The price even traded below the $3,600 support, but the $3,560 pivot acted as a solid support.
Additionally, the 50% Fib retracement level of the last wave from the $3,376 low to $3,716 high also acted as a support. At the outset, the price is currently holding the $3,560 support, with range moves. It seems like there is a short term contracting triangle formed with resistance at $3,625 on the hourly chart of the BTC/USD pair. Should there be an upside break above the $3,650 resistance, the price may climb towards the $3,700 and $3,750 levels. On the other hand, a downside break below $3,560 and $3,540 might trigger bearish moves. The next key supports are near $3,500 and $3,455.
Looking at the chart, bitcoin price is clearly consolidating and preparing for the next move either above $3,650 or below $3,540. The current price action is positive, but a convincing break above $3,650 is must for a decent upward move. If not, it could drop to $3,500 or $3,455.
Hourly MACD – The MACD for BTC/USD is about to move back in the bullish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD recovered nicely and it may soon break the 50 level.
Signs are emerging that the futures market may not be impressed by bitcoin’s recovery from 15-months lows in December – at press time, the cryptocurrency’s spot price is higher than the futures price.
As of writing, the global average or spot price calculated by CoinDesk’s Bitcoin Price Index (BPI) is currently $3,650 – up 16.9 percent from the low of $3,122 reached on December.
Meanwhile, futures contracts are trading below the spot price.
As seen above (CME chart), January futures are reporting a $20 discount (futures price-spot price). Further, contracts expiring in February, March and June are trading at a discount of $30, $40 and $80, respectively.
A futures contract is an agreement between two parties to buy or sell a something at a future specified price and date, allowing for investors to hedge or speculate on the performance of the underlying asset. Hence, BTC futures trading at a discount to spot price (also known as market inversion) is a clear indication that the participants are still bearish.
Put simply, bitcoin’s price in one month, two months and six months from now is expected to be lower than its current price. So, it could be argued that the bear market is alive and kicking.
The outlook would turn bullish if the futures start trading at a premium to spot price. Moreover, that is a classic trait of the bull market.
That said, an unprecedented rise in premium serves as a warning sign of market nearing a long-term top. For instance, BTC futures were carrying a staggering $2,000 premium over spot price in December 2017.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
Following the crypto market’s recent downturn that sent many altcoins spiraling down 10% or more as Bitcoin fell to lows of approximately $3,550, the markets have regained some strength and bounced today, leading most altcoins to surge 5% or more.
Today’s upwards move after a volatile weekend seems to confirm that Bitcoin is in fact caught in a trading range between $3,550 and $4,200, as analysts previously expected.
Bitcoin Confirms Previously Suspected Trading Range
At the time of writing, Bitcoin is trading up nearly 4% at its current price of $3,710.
On Saturday, Bitcoin plunged to lows of $3,550 from the mid-$3,600 region, which appeared to many traders as the continuance of a downwards momentum that Bitcoin has incurred after it failed to stabilize above $4,000 last week.
Today’s price surge, however, confirmed that Bitcoin does have support at $3,550, which is the price at which Bitcoin surged earlier today.
Mati Greenspan, the senior market analyst at eToro, previously noted that he believes Bitcoin is presently caught in a trading range between $3,550 and $4,200, an assessment that was validated by today’s move.
“It seems now, that bitcoin has opened a new mini-range within that from $3,550 to approximately $4,200… Movements within a range can sometimes be sudden like we saw yesterday, but unless there’s a breakout of the key levels there really isn’t much to write home about,” Greenspan explained in a market update last week.
The Trading Room, a popular cryptocurrency analyst group on Twitter, spoke about the market’s recent jump, noting that all key price levels held firm, which validated the crypto market’s recent lows as strong support levels.
“All key levels held firm & we are getting a perfect bounce so far. Will look for long entries on confirmation of trend change,” they said.
Altcoins Surge as Crypto Markets Recover from Recent Drop
The general crypto markets have recovered well from the recent drop that sent many altcoins down 10% or more.
At the time of writing, XRP is trading up nearly 5% at its current price of $0.336. This weekend, XRP fell to lows of $0.317, which appeared to act as a level of relative support. XRP is still down significantly, however, from its weekly highs of $0.38, which were hit right before Bitcoin broke below $4,000.
Ethereum has surged today and is currently trading up over 10% at its current price of nearly $130.
Ethereum’s positive price action today was not unsuspected, as DonAlt, a popular cryptocurrency trader on Twitter, aptly noted that Ethereum was nearing a buy target he had set for several months.
“Playing out nicely. The dip into the buy area was bought up entirely. I still think another visit there is very possible, that said I definitely am not looking for swing (longer term) shorts here. Zooming out & taking it slow makes trading tremendously easier,” he explained while referencing a long-term Ethereum price chart.
If Bitcoin’s price is able to climb into the low-$4,000 region in the coming days or weeks, the validity of $4,200 as a strong level as resistance will be validated.
Following a week of slow but steady gains Bitcoin fell off the digital cliff again yesterday with a flash crash that wiped out all progress made so far this year. Analysts are now looking at a short term correction if BTC can hold on to where it has currently fallen.
Further Downside Expected on Consolidation
In an epic dump that wiped out $8 billion in 60 minutes crypto markets are back near $120 billion market capitalization again. Bitcoin led the fall when it failed to break resistance at $4,050 twice yesterday. The first plunge dumped BTC to $3,850, which it held for 8 hours before a second swift purge send it tumbling to $3,670. The net result was almost 10% lost in under 24 hours.
Prominent analyst Alex Krüger has highlighted $3,600 as a key level stating that consolidation below this price would likely lead to further downsides.
Bitcoin is currently at its lowest level for the week as it plunged through previous support at $3,850. It has not been below $3,600 since the mid-December dump which saw all cryptos reach their lowest levels for well over a year.
Bitcoin fell to just below $3,200 on December 15 but managed to recover over 30% in the following ten days to reach a high of $4,200 during the ‘Santa rally’ on Christmas eve. Since then it has consolidated between $3,650 and just over $4,000.
At the moment Bitcoin is still holding within this range bound channel which is why $3,600 is a key level of support. A break through that could see things back at the 2018 low again very quickly. If Alex gets his wish and Bitcoin ends the day above $3,700 it could retest $4,000 again in the coming days.
Other prominent analysts have predicted further losses as Bitcoin faces a huge wall of resistance at $4,000. Using a plethora of different technical indicators Murad Mahmudov, who has predicted things pretty accurately in the past, said that Bitcoin is facing a very tough task breaking above $4k and that has been clearly evident with yesterday’s dump.
On the more positive side of things CEO of DoubleLine management, Jeffrey Gundlach, told CNBC that Bitcoin reaching $5,000 would be an ‘easy 25%’. He and others have noted that Bitcoin is currently trading in a $3k to $5k range though it hasn’t been anywhere near $5,000 since it plunged through it so quickly on November 19.
The crypto winter is far from over and Bitcoin is still the bellwether for things to come.
Bitcoin is losing altitude as an unwinding of bullish bets is creating downward pressure on prices.
As of writing, BTC is changing hands at $3,780 on Bitstamp – down 5 percent on a 24-hour basis – having found offers above $4,000 at 06:00 UTC.
Notably, the price drop is accompanied by a decline in the bullish bets. For instance, the BTC/USD long positions on the Bitfinex exchange fell to an eight-day low of 31,237 earlier today and are currently down 8 percent at 31,255 – the biggest single-day drop since Dec. 19.
Further, the long-short ratio has pulled back to 1.35 from the five-month high of 1.5 reached yesterday, indicating waning bullish sentiment.
What’s more interesting is that the “long squeeze” comes after repeated failure on the part of the bulls to clear the key resistance above $4,100. So, it seems safe to say that the demoralized bulls are exiting the market and that could attract sellers.
BTC/USD longs and shorts
As seen above, long positions have dropped sharply, while short positions are largely unchanged on the day. That said, today’s sell-off could entice the bears, leading to a rise in shorts and a deeper drop in prices.
The bearish doji reversal – back-to-back doji candles and a negative follow-through – seen in the above chart indicates that the recovery rally from the December low of $3,122 has stalled and the bears have regained some control.
Validating that argument is the breakdown of the trendline connecting the Dec. 28 low and Jan. 6 low. The 14-day relative strength index (RSI) is also rolling over in favor of the bears.
Moreover, the failure on the part of the bulls to force an inverse head-and-shoulders breakout could be considered a strong bearish signal, especially since the bull flag breakout, witnessed in the 4-hour chart earlier this week, had set the stage for a break above $4,300.
As a result, BTC risks falling to the major support lined up at $3,566 (Dec. 27 low).
With prices trading well below $3,934 (flag low), the bullish view put forward by the bull flag breakout on the 4-hour chart earlier this week is no longer valid.
The bearish doji reversal seen in the daily chart indicates an end of the recovery rally and has likely opened the doors to the bullish-higher low of $3,566 (Dec. 27 low). A break below that level would further strengthen the bear grip and allow a re-test of the December low of $3,122.
The confluence of the inverse head-and-shoulders neckline and the 50-day EMA, currently at $4,120, is the level to beat for the bulls. A high-volume break above that level would open up upside towards $5,000.
Bitcoin price remained well bid near the $3,980 and $3,940 supports against the US Dollar.
Yesterday’s highlighted key bullish trend line is intact with support at $3,990 on the hourly chart of the BTC/USD pair (data feed from Kraken).
The price may dip a few points towards $3,950 before making another attempt to clear $4,100.
Bitcoin price traded to a new weekly high above $4,100 against the US Dollar. BTC is correcting lower, but dips remain supported above $3,940 in the near term.
Bitcoin Price Analysis
Yesterday, we discussed about a couple of important supports near $3,940 for bitcoin price against the US Dollar. The BTC/USD pair did correct lower recently, but it found support near $3,940. Later, the price recovered nicely above $4,000 and the $4,050 levels. Buyers even breached the last swing high at $4,084 and a new weekly high was formed at $4,113. However, buyers failed to retain strength, resulting in a drop below $4,080.
The price even broke the $4,000 support and traded close to the $3,950 level. A swing low was formed at $3,966 and the price stayed above the 100 hourly simple moving average. More importantly, yesterday’s highlighted key bullish trend line is intact with support at $3,990 on the hourly chart of the BTC/USD pair. The pair is now trading above the 23.6% Fib retracement level of the recent decline from the $4,113 high to $3,966 low. The current price action is slightly bearish below $4,050. Therefore, there is a risk of a dip towards the $3,950 support to fill buy orders. On the upside, a break above the $4,040 and $4,050 is needed for more gains. Besides, the 50% Fib retracement level of the recent decline from the $4,113 high to $3,966 low is at $4,040.
Looking at the chart, bitcoin price is well supported above the $3,940. Having said that, a break above the $4,040 and $4,080 levels is needed for more gains.
Hourly MACD – The MACD for BTC/USD is about to move back in the bearish zone, with a negative bias.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD just dipped below the 50 level, with a bearish angle.
Bitcoin’s (BTC) minor pullback from two-week highs could end up fueling a breakout above the key hurdle of $4,140.
The world’s largest cryptocurrency by market value jumped to $4,090 at 17:15 UTC on Sunday – the highest level since Dec. 24 – validating the short-term bullish reversal confirmed on Dec. 20.
Even so, the positive momentum has weakened slightly in the last 36 hours. As of writing, BTC is changing hands at $3,995 on Bitstamp, having clocked a low of $3,934 earlier today.
The 3 percent correction from two-week highs, however, has carved out a bull flag on the technical charts. Put simply, the pattern often represents a pause in a rally and can accelerate the preceding bullish move.
So, it seems safe to say that the price pullback has pushed up the odds of an inverse head-and-shoulders breakout above $4,140.
BTC has created a bull flag pattern – a bullish continuation setup – on the 4-hour chart.
A 4-hour close above the upper edge of the flag, currently at $4,005, would confirm a bull breakout. That would signal a revival of the rally from the Jan. 6 low of $3,753 and would open the doors to $4,340 (target as per the measured move method).
Essentially, the flag breakout could end up yielding an inverse head-and-shoulders breakout above the neckline of $4,140.
More importantly, higher lows (marked by red arrows) at $3,566 (Dec. 27 low), $3,629 (Jan. 1 low) and $3,753 (Jan. 6 low) indicate that the bulls are in control. Therefore, crossing the flag resistance should not be a tough task.
As seen above, BTC is taking the support of the 5- and 10-day moving averages (MAs), validating the short-term bullish setup indicated by these upward sloping averages.
The 14-day relative strength index is holding in bullish territory above 50.00 and prices seem to have found acceptance above the 50-day MA hurdle.
The path of least resistance, therefore, is to the higher side.
A bull flag breakout, if confirmed, could yield a break above the inverse head-and-shoulders neckline level of $4,140.
A UTC close above $4,140 would confirm an inverse head-and-shoulders bullish reversal (transition from the bearish-to-bullish market) and open up upside towards the psychological hurdle of $5,000.
The bears may feel emboldened if BTC violates the bullish-higher low pattern with a move below $3,566 (Dec. 27 low).
The price of bitcoin, the world’s largest cryptocurrency by market capitalization, jumped 6.5 percent Sunday to rise back above $4,000, its highest point in two weeks.
CoinDesk data shows bitcoin’s (BTC) price spiked $262 on Monday at 17:10 UTC to $4,063, a move accompanied by a large injection of volume.
At press time, bitcoin is up 5.95 percent over the last seven days, regaining losses seen toward the end of December.
Bitcoin’s market capitalization has also risen substantially, up $4 billion on the day to $70.73 billion, its highest point since Dec. 25. The move signals an expansion beyond the yearly low of $3,650 and an opportunity for the bulls to push higher this week, based on current price action and momentum.
Still, bitcoin is just one of many cryptocurrencies enjoying strong upside momentum with litecoin (LTC), NEO (NEO) and Cardano (ADA) leading the top 25, up 12.16, 10.6 and 9.11 percent respectively.
The total market capitalization of all cryptocurrencies is up $6.1 billion from yesterday’s top of $132 billion and is currently sitting just above $138.1 billion CoinMarketCap data shows.
Bitcoin’s (BTC) recent pullback from highs above $4,200 could trap the bears on the wrong side of the market, the price-volume analysis indicates.
The leading cryptocurrency by market value is currently trading near $3,848, having clocked a low of $3,642 on Dec. 28. At that level, BTC was down 14.7 percent from the Dec. 24 high of $4,272, according to CoinMarketCap.
Notably, daily trading volumes across all cryptocurrency exchanges have also dropped in the last few days. At press time, 24-hour trading volume stands at $4.57 billion – down 36 percent from the Dec. 24 high of at $7.24 billion.
A low-volume price pullback is widely considered a sign of weak buyers exiting the market and hence is considered insignificant. The recent drop, therefore, is likely a temporary correction and the bearish-to-bullish trend change signaled by the 3-day chart on Dec. 20 is still valid.
The bullish case, however, would weaken if the cryptocurrency dips below the key support near $3,550.
As seen above (prices as per Bitstamp), BTC closed at $4,073 on Dec. 20, confirming a bullish outside-candle reversal (bear-to-bull change).
So far, however, the follow-through has been discouraging. Prices have dropped in the last ten days, but so have volumes.
The bullish reversal, however, would be invalidated if and when the bullish-higher low of $3,566 carved out on Dec. 27 is breached.
6-hour and 1-hour chart
The triangle breakout seen in the 6-hour chart indicates that the rally from the December low of $3,122 has resumed.
Meanwhile, the bull flag breakout seen in the hourly chart indicates a resumption of the rally from the Jan. 1 low of $3,629.
Therefore, the path of least resistance is on the higher side.
On the daily chart, BTC is likely carving out an inverse head-and-shoulders bullish reversal pattern with the neckline resistance at $4,170.
The bullish setup on the 3-day and intraday chart indicates scope for a test of $4,170 in the next few days.
It is worth noting that the 50-day moving average (MA) is still trending south, indicating a bearish setup. As a result, BTC may attract bears if the MA hurdle, currently at $3,900, proves to be a tough nut to crack in the next 48 hours or so.
Bitcoin’s low-volume drop from the recent highs above $4,200 is nothing more than a temporary correction.
BTC remains on the hunt for a break above $4,000. The bulls, however, need progress soon, as repeated failure to take out the 50-day MA of $3,900 could prove costly.
A break below the Dec. 27 low of $3,566 would open the doors to re-test of the December low of $3,122.