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Haven Demand Elusive
BTC: Price: $8,245 | MCAP: $148.56 | 24-Hr Volume: $12.67 billion
Short-term trend: Bearish
Bitcoin is struggling to beat key hurdle despite the rising US recession fears and may fall back below $8,000 in the next 24 hours.
The U.S. Institute of Supply Management said Tuesday its manufacturing index fell to a 10-year low of 47.8 percent last month from 49.1 percent in August. A below-50 reading indicates contraction in manufacturing activity.
With the gloomy data, the probability of a recession in 2020 has increased above 40 percent. The Treasury yield curve (U.S. bonds) is pricing in a 60 percent chance of recession, according to the JPMorgan data.
Also, the odds of Federal Reserve delivering 2019’s third interest rate cut in October have gone up from 40 to 64 percent over the last two days, according to CME’s FedWatch tool.
Even so, BTC is struggling to find bids and clear the 200-day moving average at $8,483 for the third straight day, which contradicts the popular narrative that the cryptocurrency is digital gold.
Notably, bitcoin has been largely trapped in a $8,200–$8,500 range since Tuesday. Technical charts show the bounce from recent lows near $7,700 has run out of steam at the 200-day MA and the double bottom breakout confirmed 48 hours ago has failed.
The failed breakout indicates the bearish sentiment is quite strong and suggests scope for a fresh drop toward recent lows near $7,700.
The bearish case would weaken if prices find acceptance above the 200-day moving average, currently $8,483.
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.
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. Popular analyst Josh Rager believes BTC could drop to $6,600-$6,300 where there is major interest.
The bearish setup would be invalidated if and when prices find acceptance above $9,049.
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Ardor Breaks The 50-Day Moving Average
ARDR: Price: $0.05 | MCAP: $58.2 million | 24-Hr Volume: $2.4 million
Short-term trend: Bullish
ARDR is up 11.8 percent on the day after breaking above the 50-day moving average (yellow line) in the early hours of Asia's trading period.
The onus is now on the bulls to maintain price action above that average in order to entice further investment and drive prices toward the 200-day moving average, a marker for bullish market health and seal the directional bias moving forward.
The daily RSI is also above the neutral 50 line and is trending bullish on recent moves, but a pullback is likely expected in the immediate short-term as it approaches historical resistance at 54.
Long-term trend: Neutral
ARDR has been trending sideways for 78 days and is in need of greater liquidity seen by total levels of daily volume, which remain low.
A move above the 0 neutral line on the awesome oscillator (AO) would provide the first bullish signal in over a week, but whether that translates to further growth remains to be seen.
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| Energi Falls Further
NRG: Price: $2.61 | MCAP: $55.6 million | 24-Hr Volume: $338,449
Short-term trend: Bearish
NRG continues its 97-day falling channel/broadening wedge (typically bullish) with a larger than average loss on today's current candle as it dropped 9.7 percent over a 24-hour period.
Volume has been falling alongside a declining price since Aug. 26 and should provide a means to reverse the downward trend, as per bullish volume analysis.
But a breakout to the upper sloping trendline remains to be seen as a denial from $4 on Sept. 24 has thrown into contention its ability to challenge the lower low, lower high market structure. Bearish until a firm close above the red resistance zone occurs.
Long-term trend: Bearish
The daily MACD is beginning to form a bear cross below 0, indicating that sellers are firmly in control of the NRG market. Look for a bounce provided from oversold conditions on the daily RSI should prices begin to reverse from recent market sell-offs.
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“We are all underestimating the potential of Bitcoin,” Anthony Pompliano, Founder and Director at Morgan Creek Digital Assets, tweeted Wednesday while detailing the top cryptocurrency’s role in the emerging economies.
Pompliano believes the citizens of the developing economies could buy bitcoins and insulate themselves from the poor decision making of their leaders.
Most emerging market central banks are under pressure to deliver aggressive interest rate cuts, as their respective economies are facing economic slowdown due to the ongoing US-China trade tensions.
For instance, as per Reuters poll, government bond yields in India, South Korea, Indonesia, Malaysia, Philippines and Singapore are expected to fall between 10 and 40 basis points over the coming year. Bond yields usually drop on growth slowdown and easy monetary policy.
Also, the emerging market governments may embark on expansionary fiscal policies to support the economy.
Aggressive fiscal and monetary policies almost always lead to inflation and a drop in the national currency’s purchasing power.
Gold, being a classic inflation hedge, usually rallies on expansionary policies. Bitcoin is also limited in supply and deflationary in nature, which gives it an innate value, like rare metals.
Bitcoin, therefore, may see increased demand from the emerging market investors in the near future. |
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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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Not So Safe Haven