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Bitcoin's Golden Cross Bullish For The Long-Term
BTC: Price: $8,750 | MCAP: $155.58 Billion | 24-Hr Volume: $23.30 Billion
Short-term trend: Bearish
Bitcoin has dropped below $9,000, as expected, and is currently trading around the former resistance-turned-support of $8,800. A violation there looks likely and could yield a test of $8,500, as the long-held support of the 200-day average has been convincingly breached.
Interestingly, gold has also come under pressure with prices falling to three-month lows and the U.S. stock markets are flashing red with the futures on the S&P 500 reporting a 0.17 percent drop on the day.
Both the yellow metal and bitcoin are flashing red despite reports stating that Federal Reserve's balance sheet has registered a biggest monthly expansion since 2008. Long-term trend: Neutral Bitcoin (BTC) is on track to produce a bullish long-term signal not seen in 3 and a half years. The 50-period moving average (MA) and the 100-period MA have edged closer together after BTC rebounded from $7,293 to $10,350 on Oct. 26, according to Bitstamp data. A cross of the 50-period MA moving up above the slower 100-period MA, known as a golden cross, generally hints at a strong shift in a trend and can act as confirmation of a bullish bias for the long-term view. The last time that instance occurred on the weekly chart was way back in May 2016, when the price of BTC rose from $438 to near $20,000 - a 4,800 percent increase.
Time will tell whether or not this pattern will come to fruition. Needless to say it would be a very bullish signal aligning with BTC's halving event in May next year. Read Analysis
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Tezos Continues Its Grind
XTZ: Price: $1.21 | MCAP: $822.1 million | 24-Hr Volume: $89.5 million
Short-term trend: Pullback
XTZ has defied trader expectations and managed a full bodied candle by yesterday's (Nov. 8) close. Up 23 percent on the day, XTZ also managed to touch Aug. 15's peak, its highest price point in 84 days.
Prices remain overbought, evidenced by the daily RSI, so hesitation on a continuation in the rally is warranted, the safest play would be to take profit and therefore provides a justification for a pullback, coupled with the lagging indicators. However, should today's candle close above yesterday's at $1.30, then enough buying pressure could open doors to $1.40 (23.6 percent Fibonacci retracement).
Long-term trend: Cautiously bullish
The weekly candle has presented a strong case for a reversal in the trend as the period Nov. 4 to present has proved to be significantly bullish based on proceeding daily price action felt this week.
Price needs to hold above the 200-DMA as confirmation for a continuation in the trend and a reversal in the lower high, lower low market structure.
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| ABBC Confirming Bearish Downtrend
ABBC: Price: $0.21 | MCAP: $780.2 million | 24-Hr Volume: $58.1 million
Short-term trend: Bearish
Price has fallen bearish below the 55-period exponential moving average (EMA), a barometer of market health when prices are above or below, on the daily time frame, hinting at a deeper drawdown.
Regaining a foothold above that line at $0.22 would go a long way to reversing the 3-day sell-off, that theory can be supported by a reversal in the daily RSI as it moves away from near oversold conditions.
Long-term trend: Neutral
Average total daily volume has fallen alongside prices, a bullish volume analysis and may present respite from the downward pressure since it first failed to capitalize above $0.32 (major resistance).
More buyer momentum is needed to regain a bullish foothold in the long-term and may only come once prices have retested the 100-day moving average at $0.17.
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Federal Reserve's (Fed) balance sheet is expanding again. Over the last month, its size increased by $162 billion – the biggest monthly rise since October 2008, as noted by @Rhythmtrader.
Crypto markets believe the Fed's latest operation is nothing but round four of quantitative easing (QE) – and central bank purchases government securities or other securities from the market in order to increase the money supply and encourage lending and investment.
Also, prominent observers, including the likes of Bitcoin skeptic and CEO of Euro Pacific Capital Peter Schiff, consider QE programs as inflationary. Investors, therefore, may feel tempted to buy BTC – an asset with anti-establishment appeal and limited supply (deflationary).
History, however, tells us that QE programs tend to hyper inflate traditional markets like equities. For instance, the Fed conducted three rounds of quantitative easing between 2009 and 2015. During the same time period, the S&P 500 rallied more than 200%, starting from $669 to $2,134.
Note that gold, which traded near $680 in October 2008, rallied to a high of $1,920, possibly due to fears that QE would lead to hyperinflation. That argument was put forward mainly by Keynesian economists.
However, by 2012, it became clear that QE was only boosting asset prices. Also, economic inflation – Fed's 2 percent target – remained elusive. As a result, by mid-2013, gold had dropped to $1,180, despite QE taper tantrum and the resulting emerging market instability.
Hence, the narrative that the Fed's QE programme is inflationary and will put a strong bid under BTC does not hold ground. That said, a persistent fiscal and monetary indiscipline may end up damaging the confidence in the fiat monetary system, possibly forcing investors to explore the world of bitcoin, which according to many, is the closest thing to perfect competition. |
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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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Losing Ground