Weekly Review: Low Volume Lift

Technical breakout powers bitcoin to $8,300

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June 14, 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!   Bitcoin Rises To $8,300 But On Low volumes BTC/USD: Price: $8,280 | MCAP: $147 billion | Maximum Gain: 1.5% Why we were intrigued:   Bitcoin's close below the historically strong support of the 30-day price average on June 4 had opened the doors for a deeper correction to levels below $7,000. The concurrency, however, defended $7,500 for five straight days and bounced up to $8,000 on Monday.  More importantly, BTC exited an eight-day long $700 range of $7,500-$8,100 with a bull breakout on Wednesday. The range breakout was also accompanied by a bearish channel breakout on the 4-hour chart.  With the activation of twin bullish cues, BTC looked ripe for a retest of $8,400-$8,500. So, our analyst recommended a buy position in European trading hours on Thursday when the price was trading near $8,130. As expected, BTC remained bid and rose to a high of $8,336 in the U.S. trading hours. Long position, however, was squared off at $8,250 in the European trading hours today.  The early exit made sense as trading volumes continue to remain low, despite the price breakout. Infact, the recent rally from $7,500-$8,300 isn't backed by trading volumes.  For instance,  bitcoin’s 24-hour trading volume across all cryptocurrency exchanges currently stands at $19 billion – down 42 percent from the high of $33 billion seen on May 16, according to CoinMarketCap. More importantly, daily trading volume has averaged roughly $18 billion throughout the recent recovery from $7,500 to $8,300, which is significantly lower than the sell volume of $24 billion and $29 billion seen on May 30 and June 4.  It is worth noting that bitcoin’s daily trading volume consistently printed above its 50-day moving average throughout the price rise from $4,000 to $9,000. However, volume has been sitting below the 50-day average since June 6, putting a question mark on the sustainability of the rally from $7,500 to $8,300. The numbers from major exchanges included in the calculation of Bitwise’s “real” bitcoin trading volume also show the recent price rise is not backed by big volumes. The Trade The Result Everex's Low-Volume Bull Move Was Short-Lived EVX/BTC: Price: 9899 BTC | MCAP: 454.60 BTC | Maximum Loss: Trade not entered Why we were intrigued:   EVX, ranked 230 as per market capitalization on CoinMarketCap, was reporting 12 percent gains on Wednesday.  The spike validated both the four-week long basing pattern near $9,000 sats and the violation of the trendline connecting April 1 and May 6 highs.  The cryptocurrency, therefore, looked set for a move above the key resistance at 12684 sats - the high of the inverted bull hammer candle created on May 22.  Our analyst was expecting a move to 15,000 sats in the near-term. Instead, the cryptocurrency has dived below $9,000 sats today, invalidating the basing pattern. Further, the 14-day relative strength index is not reporting bearish conditions with a below-50 print.  Therefore, the path of least resistance is now on the downside. There was always a risk of Wednesday's double-digit gains trapping buyers on the wrong side of the market, as trading volumes were anemic.  As seen in the image below, our analysts had mentioned low volumes as a cause for concern. Cryptocurrencies with extremely low trading volumes are similar to operated stocks in a sense that they seldom respect technical studies.  So the key to trade such low-volume altcoins is to be flexible and avoid HODLing large positions.    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. Copyright © 2018 CoinDesk, All rights reserved.  Our mailing address is:  250 Park Avenue South New York, NY, 10003, US  Want to change how you receive these emails? 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