Weekly Review: BTC Bulls & Bears Feast

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May 17, 2019 Welcome to the weekly edition of the CoinDesk Markets newsletter! Every Friday we will review our cryptocurrency price predictions posted during the week via CoinDesk Markets Twitter  or our private room on StockTwits, the CoinDesk Dojo.  "Trades You Missed" will feature our favorite trade ideas or technical analysis insights that accomplished impressive gains, where as "Trades We Missed" will feature those that took a turn for the worse. Wins and losses are both part of the trading game, so we hope you will learn how to replicate our successes and minimize losses!   Soaring BTC Comes Back to Earth BTC/USD: Price: $7,188 | MCAP: $$127.2 billion | Maximum Gain: 16.8% Why we were intrigued: Bitcoin bulls reminded us all just how tenacious they can be this week when the cryptocurrency’s market is no longer under bearish constraint like it was for all of 2018.   The price of bitcoin rose more than $1000 on both May 11 and 13, pushing to new local highs eight days in a row from May 6 to May 14 and increasing 47 percent in the process, according to Coinbase prices.   While indeed such a move is further evidence the world’s largest crypto has exited it’s bear market, that does not mean it is immune to pullbacks and corrections in price as a result of reaching overbought market conditions.   Because of this, our analyst Omkar was able to spot key signs of buyer exhaustion when BTC was priced around $8,000, identifying a sell as the optimal trade with $7,500-$7,000 as the target.   Omkar noted how bitcoin’s price had bounced off of the 50-hour moving average (MA) just as it had done multiple times in the previous days, but this time was different as Chaikin Money Flow (CMF) and Relative Strength Index (RSI) began to lose altitude and failed to validate bitcoin’s higher high above $8,300 by printing lower highs.   As a result, bears became the ones to remind us of their tenacity by inducing a near $2000 sell-off below $6,600 on most exchanges during Friday’s trading session. In all, the move marked a 16.8 percent profit potential if a short had been entered at the time of the initial post.   The Trade The Result Bitcoin Cash Traps Buyers and Sellers BCH/BTC: Price 0.04944 | MCAP $6.3 billion | Maximum Loss: 10% Why we were intrigued: Not only did bitcoin blast off this past week, so did many other cryptocurrencies even if just temporarily, including Bitcoin Cash (BCH/BTC) defying a bearish technical setup in the process.   On April 3 and April 13, BCH printed two sharp tops just below 0.06800 resembling a “double top” formation that is commonly regarded to be a bearish reversal pattern.   In fact, BCH did fall below its neckline of 0.05128, seemingly giving confirmation to the reversal and what’s more, its price then rejected multiple times from this level that was previous support to become sufficient resistance - the definition of bearish polarity.   Because of the multiple bearish indiciations, we thought a dip back to 0.043 would be in the offing, but the market had other plans in mind.   On May 16th, bitcoin cash bulls showed up and drove price 10% above its opening price of .05063, sending BCH back above the support turned resistance line and invalidating the bearish setup.   Unfortunately for the new bulls however, the gains were temporary and its price has since receded back to where it is now trading, 0.0498.   With BCH/BTC here, there were no winners as both bears and bulls became trapped on the wrong side of the market.   While there was no official sell call, if a short had been opened at the time of the post a trader would have been exposed to a potential 10 percent loss if based on the May 16 high.   The Trade The Result   We're excited to announce the launch of the CoinDesk Dojo, a premium subscription part of StockTwits' recently announced Premium Rooms product. Ask the analysts—Omkar, Sam and Seb—questions about charts and talk with other traders looking to profit off the volatility of the crypto markets.  Create an account on StockTwits and then subscribe! Subscribe Here   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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