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Indecisive Market
BTC: Price: $10,570 | MCAP: $186.63 billion | 24-Hr Volume: $18.24 billion
Short-term trend: Neutral
Bitcoin created a "spinning top candle" on Wednesday, pouring cold water over the optimism generated by Mondaay's triangle breakout.
The spinning top indicates an indecisive market and has made today's UTC close pivotal. A close above the candle’s high of $10,834 would imply a continuation of the rally from the recent low of $9,320.
A more reliable indicator of bullish revival would be a UTC close above the lower high of $10,956 created on Aug. 20. A bullish close above $10,956, if confirmed, would open the doors to $12,000.
Meanwhile, a close below the spinning top’s low of $10,378 would indicate that the rally from the recent low of $9,320 has ended and the bears have regained control. That could yield a sell-off back to $9,755 (Aug. 22 low).
Observers may feel tempted to rule out the bearish close, as the daily chart indicators like the moving average convergence divergence histogram are reporting bullish conditions.
That, however, may prove costly, as the spinning top candle has appeared following a $1,500 rally, and the indecision predominantly represents bullish exhaustion. If the bulls were strong, the spinning top would not have appeared. Hence, a correction could be around the corner.
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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Enjin Coin Breaks Higher
ENJ: Price: $0.085 | MCAP: $66.3 million | 24-Hr Volume: $10.83 million
Short-term trend: Neutral
ENJ has broken above a former consolidation support zone around $0.081 on the back of declining bullish volume, a weak sign for buyers looking to push the price beyond on today's candle.
However, a bull signal in the form of the awesome oscillator histogram bars ticking up above zero on the daily chart is a positive sign that buyer momentum is beginning to pick up period-to-period.
Watch for increasing bull volume backing the reversal breakout otherwise consider the rally to be short-lived and a pullback to the former resistance turned support at $0.081 as more likely.
Long-term trend: Cautiously bearish
Despite having risen 8.75 percent on the day, the long-term trend remains bearish until price breaks beyond the prior consolidation zone above $0.097 , but that looks unlikely given its approach toward overbought conditions above 70 on the daily RSI (currently 64.09).
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| Egretia's Last Chance
EGT: Price: $0.015 | MCAP: $92.6 million | 24-Hr Volume: $0.3 million
Short-term trend: Bearish/Oversold
EGT is down 8.24 percent on the day after a bloody early Asia morning open brought its prices to Aug. 29's wick dip low creating an opportunity for a double bottom bounce, aided by oversold conditions on the daily RSI.
However, conditions remain bearish as total daily volume for sellers increased alongside the sell-off, aiding the legitimacy of the move.
Keep a close eye at current supports near $0.015 to see if it can defend this area or if it will move to set a new all time low.
Long-term trend: Bearish
A degree of caution is warranted given the low levels of investor interest seen by small volume bars and weaker momentum on the awesome oscillator (AO).
Keep a close eye on a rebound from the daily RSI and a move up with a green tick on the histogram bars for the AO to see if the bulls can fend off any more market sell-offs.
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Alternative cryptocurrencies (altcoins) have taken a beating against bitcoin, the top cryptocurrency as per market value, in the first eight months of this year and may fall further in the near-term, according to Jonathan Hamel.
As of yesterday, ethereum's ether token was down 85 percent from its all time high in BTC terms. Other prominent names like EOS, bitcoin cash and XRP were also down more than 80 percent.
Hamel expects another 80 percent slide in their BTC-denominated exchange rates as the big players – Venture Capitalists and Diversified Crypto Funds – are reportedly running for exit.
For instance, in 2017, Fred Wilson, the Co-Founder and Managing Partner of Union Square Ventures, had said that ethereum's market capitalization will surpass that of bitcoin by year-end.
ETH did not become the top cryptocurrency in 2017-18 and Wilson now finds ethereum confounding, hard to build on with scaling issues and believes many developers are now looking elsewhere.
It is worth noting that ethereum's network utilization surpassed 90 percent last month, as per Etherscan data, and fears of capacity crisis gripped the market ever since ethereum's Founder Vitalik Buterin said the blockchain is almost found.
Time for bottom fishing?
Most alternative cryptocurrencies are extremely oversold against bitcoin, according to a widely followed relative strength index.
Technical indicators, however, can remain oversold for a prolonged period of time in a strong (bearish) trending market. Put simply, the RSI can remain oversold longer than the buyers can stay solvent!
Also, the rise in bitcoin's dominance rate, the top cryptocurrency's share of the total market, is showing no signs of stalling. The gauge is currently hovering above 70 percent, the highest level since March 2017, according to CoinMarketCap.
So, bottom fishing in alternative cryptocurrencies could prove costly. The probability of a corrective bounce in altcoins would improve if and when bitcoin's dominance rate charts bullish exhaustion patterns (Doji, bearish engulfing, etc). |
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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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