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On The Front Foot
BTC: Price: $10,530 | MCAP: $186.63 billion | 24-Hr Volume: $18.24 billion
Short-term trend: Neutral
Bitcoin eked out 2.24 percent gains on Tuesday with buying volumes hitting the highest level since Aug. 15, according to Bitstamp data.
The high-volume bullish move to 13-day highs above $10,780 added credence to Monday's descending triangle breakout and opened the doors to $10,956 (Aug. 20 high).
The positive reading on the moving average convergence divergence histogram, an above-50 reading on the relative strength index, and the bullish crossover 5- and 10-day moving averages also favor a rise to $10,956.
A UTC close above that level would revive the short-term bullish outlook and expose the next resistance lined up at $12,000.
On the downside, the hourly chart support of $12,286 is the level to defend for the bulls. A break lower would shift the focus to the bearish weekly chart indicators and allow a deeper drop to $9,750.
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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Rush to the Double Top
MAID: Price: $0.20 | MCAP: $92.6 million | 24-Hr Volume: $0.3 million
Short-term trend: Neutral
MAID has risen by 30 percent over a two-day period with choppy price action having formed a double top from a rejection in continuation seen Sept. 3.
The higher low formation and a move above the 50-period moving average (MA) shows a willingness by the bulls to continue the trend north, but unfortunately the low levels of volume and a double top followed by a lower high spells out bad news.
Watch to see if it can climb above prior highs at $0.22 for confirmation of a continuation, otherwise look south to $0.16 (position of the 50-period MA).
Long-term trend: Bearish
While its daily performance has been exceptional with 10-30 percent rebounds in its price, the long-term trend remains bearish given its formation of lower highs and an unwillingness by the bulls to challenge greater heights with low levels of total trading volume adding to the bearish outlook.
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Wanchain's Rejection
WAN: Price: $0.34 | MCAP: $36.7 million | 24-Hr Volume: $14.3 million
Short-term trend: Bearish
WAN continues to fall on the day and is down a further 11.44 percent while simultaneously facing a heavy resistance along the 50-period moving average (MA) on the weekly chart.
The RSI has nosedived after rising off of a bullish attempt at breaking the 50-period MA on Aug 19, before it was swiftly rejected a week later, highlighting the loss of momentum for the bears in the short-term.
The awesome oscillator (AO) may offer hope in the form of a bull signal with its histogram bars moving above 0, but that will need to be backed by strong weekly demand seen in total trading volume and a move above the aforementioned 50-period MA.
Long-term trend: Bearish
As previously mentioned, a move above the 50-period MA could be enough to spark a bull revival taking prices to $0.44 but that seems unlikely for the foreseeable future as the current weekly candle shows a large sell-off is beginning to set a lower low.
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Bitcoin moved back above $10,000 over the weekend and is currently trading at $10,520, representing nearly 13 percent gains on the one-month low of $9,320 on Aug. 29.
Many observers have associated the recovery with an increased safe haven demand amid escalating US-China trade war and the resulting drop in China's Yuan (CNY).
After all, USD/CNY rose to nearly 0.81 percent on Aug. 26 and extended gains to a fresh multi-year high of 7.1842 yesterday. During the same time frame, BTC bottomed out at $9,320 and rose to highs above $10,750 (yesterday's high).
Bitcoin skeptic and CEO of Euro Pacific Capital Peter Schiff, however, is warning investors against buying the safe haven narrative.
Schiff is of the opinion that there is no safe haven demand for BTC and the cryptocurrency's price has rallied due to belief among speculators that BTC is the preferred safe haven in China.
Indeed, there is no proof of Chinese investors rotating money out of Yuan and into bitcoin.
That said, if BTC continues to move in the opposite direction of BTC over the next year or so, then it may begin to draw safe haven bids like Gold, Japanese Yen and Swiss Franc.
What are safe haven assets?
A safe haven asset is the one that is expected to retain or increase its value in times of market turbulence. It is often confused with a hedge – an asset uncorrelated with the stock market performance on average.
A safe haven is an asset that is uncorrelated with stocks during market crash.
Gold is considered by many as a safe haven and a hedge. For instance, it is a hedge against inflation and it is tends to attract haven demand during bouts of risk aversion in stock markets.
Very low-yielding currencies like the Japanese Yen (JPY) and Swiss Franc (CHF) are often used to fund investments in high yielding currencies. The risky investments are squared off during times of stress in markets, thus leading to an uptick in JPY, CHF.
Bitcoin is uncorrelated to other financial markets and that makes it an ideal safe haven. according to some observers. |
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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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Bitcoin a Safe Haven?