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Failed Breakout
BTC: Price: $10,070 | MCAP: $181.25 billion | 24-Hr Volume: $16 billion
Short-term trend: Bear Trap
Bitcoin’s drop from $10,949 to $9,855 (Wednesday low) may be a bear trap, as selling volumes have dropped throughout the price pullback.
As seen in the chart below, the red bars have produced lower highs, meaning the selling volume, or pressure, has eased along with the price. A low-volume decline is often short-lived and ends up trapping the bears on the wrong side of the market.
Also, the pullback seen in the last few days has taken the shape of a falling wedge on the 4-hour chart. A breakout, if confirmed, would open the doors for re-test of recent highs above $10,900.
The breakout looks likely with the 4-hour chart moving average convergence divergence (MACD) histogram reporting a bullish divergence – higher lows contradicting lower lows on price.
The bullish case would weaken if prices drop below the previous long-tailed candle’s low of $9,855 with a solid rise in selling volumes (red bar breaches falling trendline).
Long-term trend: Neutral
Bitcoin's monthly chart shows a double inside bar pattern – August’s candle falls within July's high and low and July’s candle is engulfed by June's high and low.
Double inside bars indicate indecision and lack of volatility and are considered a sign of bullish exhaustion, if they occur after a notable price rally, which seems to be the case here.
Also, the selling volume witnessed in July was the highest since March 2018. So, the long-run outlook stands neutralized.
A break above the high of the first inside bar ($13,200) is needed to revive the bullish outlook and a move below the low of the first inside bar ($9,049) will confirm a bearish reversal.
Traders can also take a weekly (Sunday, UTC) close or consecutive high-volume daily closes above $12,000 as a sign of bullish continuation. After all, a weekly close above $12,000 has remained elusive the last week of June.
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Litecoin Gains Ground Against Second-Largest Cryptocurrency
LTC/ETH: Price: 0.39643 ETH | MCAP: 25 million | 24-Hr Volume: 14 million
Short-term trend: Bullish
Up 1 percent on a 24-hour basis, LTC/ETH is currently teasing an upside break of the trendline connecting June 12 and Aug. 1 highs.
The cryptocurrency has created a rounding bottom, a bull reversal setup, over the last four weeks. Further, the 5- and 10-day moving averages are now trending north.
The moving average convergence divergence histogram is also gaining altitude above the zero line, a sign of strengthening bullish momentum.
Therefore, the short-term outlook is bullish and prices could rise to 0.4200 ETH in the next few days. The bullish case would weaken below the recent low of 0.3718 ETH.
Long-term trend: Neutral
The back-to-back indecisive weekly candles have neutralized the bearish setup. The seller exhaustion on the weekly chart supports the short-term bullish case. That said, the long-term outlook would turn bullish only if the potential bounce, as suggested by the daily chart, ends up clearing the July high of 0.4650 ETH.
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| Decred Hits Record Low
DCR/BTC: Price: 0.002218 BTC | MCAP: 22,955 BTC | 24-Hr Volume: 915.75 BTC
Short-term trend: Bearish
Decred fell to a record low of 0.002195 BTC on Binance a few minutes before press time, having confirmed downside break of a sideways trading range with a 3.30 percent decline on Tuesday.
The 5- and 10-day moving averages are again trending south and the moving average convergence divergence histogram has crossed below zero (bearish territory).
More importantly, the relative strength index is still holding above 30, meaning the cryptocurrency isn't oversold and could drop further toward the psychological support of 0.0020 BTC. Long-term trend: Bearish
The bias will remain bearish as long as prices are holding below the Sept. 3 high of 0.002689 BTC. A weekly close above that level is needed to invalidate bearish lower highs setup and confirm a bullish reversal.
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Bitcoin has created a big contracting triangle or a pennant pattern over the last 2.5 months and @XRPBitcoin believes the price congestion will end with a bullish breakout.
Pennants are widely considered as continuation patterns, meaning they accelerate the preceding bullish or bearish move.
In BTC's case, the pennant has appeared following a rally from $4,000 to $13,880. So, breakout, if confirmed, would imply a resumption of the rally from lows near $4,000 seen in the first week of April and would open the doors to test of record highs near $20,000 hit in December 2017.
Note that bitcoin is set to undergo mining reward halving in May 2020. The markets may price in an impending supply cut in the run-up to the event.
Hence, a pennant breakout looks likely. That bullish development, if confirmed, will likely bode well for the XRP, ethereum's ether token and other cryptocurrencies. |
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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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Bear Trap