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Top Cryptocurrency Rebounds From Key Support
BTC: Price: $8,065 | MCAP: $145.00 Billion | 24-Hr Volume: $15.39 Billion
Short-term trend: Bearish
A historically strong support has again saved the day for bitcoin bulls.
The leading cryptocurrency ran into offers over the weekend and found acceptance below $8,000. The sell-off, however, ran out of steam near the 100-week moving average (MA) support at $7.753 in the Asian trading hours today, allowing prices to rise back above $8,000.
Note that the long-term MA acted as strong support in the preceding two weeks and during the early stages of the previous bull market.
Hence, the latest bounce from the 100-week MA may excite both short-term traders and long-term investors, yielding a stronger corrective rally.
The daily chart indicators are also calling a corrective bounce to the 200-day MA resistance at $8,564. A violation there would expose resistance at $8,833 (June high), as per Bitstamp data.
If prices find acceptance below the 100- week MA, the case for a corrective rally would weaken and the cryptocurrency would likely drop to $7,200.
Long-term trend: Bearish
Bitcoin closed below $9,049 on Sept. 30, confirming a bearish inside bar candlestick reversal on the monthly chart.
The cryptocurrency had charted consecutive inside bar candlesticks in July and August, indicating indecision or consolidation.
The tug of war between the bulls and the bears ended with a 20 percent drop in September. Further, the weekly relative strength index is now reporting bearish conditions with a below-50 print.
Put simply, the path of least resistance is to the downside and a drop to $7,000 or even lower could be see in the next few weeks. The bearish case would strengthen once the 100-week MA support is breached.
The bearish setup would be invalidated if and when prices find acceptance above the former support-turned-resistance of $9,049.
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XRP Hits Highest Since July 7
XRP: Price: 3,457 BTC | MCAP: 1,479,788 BTC | 24-Hr Volume: 197,655 BTC
Short-term trend: Bullish
XRP, the third-largest cryptocurrency by market capitalization, rose to 3,483 sats on Binance earlier today. That was the highest level since July 7.
The daily chart shows an inverse head-and-shoulders breakout, a bullish reversal pattern. The breakout has opened the doors for 3,830 sats (target as per the measured move method).
Supporting the bullish case are the ascending 5- and 10-day moving averages. The 14-day relative strength is also reporting bullish conditions with an above-50 print. The bullish case would be invalidated if prices drop below Sunday's low of 3098 sats, although that looks unlikely.
Long-term trend: Neutral
The inverse head-and-shoulders breakout has invalidated the long-term bearish setup. A bullish reversal would be confirmed if and when prices witness a falling wedge breakout on the weekly chart seen below.
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Centrality Is The Biggest Loser
CENNZ: Price: 1049 BTC | MCAP: 8500 BTC | 24-Hr Volume: 24.25 BTC
Short-term trend: Overbought
Centrality's BTC-denominated exchange rate has dropped by more than 8 percent in the last 24 hours to take the top spot on the list of the worst performing cryptocurrencies.
Notably, the daily candle has taken the shape of a spinning top - a sign of bull exhaustion. After all, the candle has appeared following a rally from 2,592 sats to 19,950 sats seen in the three days to Oct. 14.
Today's pullback adds credence to the overbought conditions reported by the 14-day relative strength index (RSI) and suggests scope for a deeper drop to the ascending 10-day moving average, currently at 6469 sats.
A strong bounce from the ascending 10-day MA, if any, would revive the bullish view.
Long-term trend: Bullish
Centrality jumped a staggering 394 percent last week, confirming a falling wedge breakout on the weekly chart, as seen below.
While the exact reason for the solid rally is now known yet, the technical outlook has turned bullish with the falling wedge breakout. Hence, pullbacks, if any due to short-term overbought conditions, could be short-lived.
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Bitcoin fell by 20 percent in September and is currently down 40 percent from 2019's high of $13,880 hit at the end of June.
Despite the recent drop, the premier cryptocurrency is still reporting triple-digit gains on a year-to-date basis and is still the best-performing asset of 2019.
Gold, a classic safe haven asset, is up 17 percent on a year-to-date basis and Standard & Poor’s 500 Index, a global benchmark for equities and risk assets, has added 21 percent.
The year’s solid gains might entice big institutional investors like pension funds and endowments, struggling to hit return targets so they can meet obligations to retirees and other beneficiaries, according to executives at the cryptocurrency-focused investment firm KR1.
After all, government bonds across the advanced world are offering negative yields and with the global trade tensions showing no signs of ebbing, the equity markets are looking riskier than ever.
Also, bitcoin's supply is scheduled to drop by 50 percent in May 2020 and that will likely keep the cryptocurrency better bid over the next few months. |
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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 Looks North