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!
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Range Breakdown
BTC/USD : Price: $9,570 | MCAP: $171.83 | Maximum Gain: +6.88%
Why we were intrigued:
Bitcoin carved out a bearish lower high at $10,956 on Aug. 20 and fell to the 100-day moving average (MA) on the following day.
Over the next six days, the top cryptocurrency by market capitalization, traded in a sideways manner above the 100-day MA with the upside capped above $10,500.
Bitcoin's inability to produce a strong bounce from the 100-day moving average was indicative of weakening bullish sentiment.
Further, the long-term indicators were reporting a bullish-to-bearish trend change. For instance, the weekly moving average convergence divergence fell below zero on Monday, the first negative print since February.
Also, the Chaikin money flow had begun printing lower lows, a sign of increasing selling pressure.
So, a bearish trade setup was shared on shared on CoinDeskDojo on Aug. 28, calling a move lower to $9,400 and $9,000. At that time, BTC was trading at $10,095.
As expected, the cryptocurrency fell to a one-month low of $9,320 on Bitstamp on Aug. 29. As of now, BTC is changing hands at $9,570.
Looking forward
Bitcoin's three-day chart is reporting a contracting triangle breakdown and a below-50 reading on the RSI.
With the path of least resistance to the downside, BTC risks falling to $9,000 and could extend the slide to the three-day chart 50-candle MA, currently at $8,738, in the next few days.
The hourly chart RSI has turned bullish, so a corrective bounce to the former support-turned-resistance of $9,755 (Aug. 22 low) could be seen before a slide to $9,000. The short-term bearish case would be invalidated above Wednesday's high of $10,280. The Trade
The Result
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Everex Tracks Bitcoin Lower
EVX/BTC: Price: 0.00004915 BTC | MCAP: 1,130 BTC | Maximum Loss: -0.82%
Why we were intrigued:
Everex, ranked 218 as per market capitalization on CoinMarketCap, jumped 34 percent on Aug. 21, confirming a short-term bearish-to-bullish trend change.
The reversal was backed by a surge in buying volumes. Further, the relative strength index (RSI) had jumped above 50 on Aug. 21, validating the bullish reversal.
So, the pullback seen on the following day was expected to be short-lived. After all, markets often shake out weak hands before building on a major bullish breakout.
Hence, a buy call was initiated on Aug. 23, when the cryptocurrency was trading at 4970 sats. So far, however, the expected rally to 6500 sats has remained elusive.
As of writing, EVX/BTC is trading above 4900 sats, having spent the last six days trading the 4600-5400 range. The lack of strong follow-through to Aug 21's bullish breakout could be associated with bitcoin's slide from $10,100 to $9,400 and the resulting risk aversion in the broader market.
A risk-off market is the one where investors rotate money out of high-risk lesser-known alternative cryptocurrencies (altcoins) and into bitcoin, thus leading to a drop in the altcoin/BTC pairs.
The Trade
The Result
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| 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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Bears on Top