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Key Hurdle Continues to Cap Gains
BTC: Price: $9,290 | MCAP: $167.97 Billion | 24-Hr Volume: $28.47 Billion
Short-term trend: Bullish
Bitcoin pulled back from highs above $9,500 to $9,200 during the Asian trading hours, keeping intact the resistance of the trendline connecting June 26 and Aug. 6 highs.
The cryptocurrency has failed multiple times to penetrate the descending trendline over the last 11 days. Even so, it is early to call a bearish reversal, as the 200-day MA support at $9,127 is intact.
A high-volume UTC close above $9,470 is needed to confirm an upside break of the falling trendline. That would imply a resumption of the bull market from lows near $4,100 seen at the beginning of April and open the doors for a re-test of the 2019 high of $13,880.
Acceptance below the 200-day MA would weaken the immediate bullish. The resulting sell-off to $8,500, if any, will likely be transient.
As of now, however, the bearish case looks unlikely. This is due to the fact that the drop from $9,500 to $9,200 lacked volume support. Low-volume pullbacks are usually reversed.
Further, with reward halving due in May 2020, investors will likely view dips below the 200-day MA, if any, as buying opportunities.
Long-term trend: Bullish
Reward halving is likely to keep bitcoin better bid over the next few months. Historical data shows the cryptocurrency rallied from $5 to $16 during the six months leading up to the reward halving in May 2020.
Also, BTC jumped from $360 to $780 in the four months to mid-June 2016, before trimming gains and falling back to $465 in August, when the block reward was cut from 25 BTC to 12.5 BTC.
More importantly, BTC continued to scale new heights following the reward halving. The bullish case stronger if we take into account the strengthening narrative that the top cryptocurrency is a digital gold and a hedge against inflation.
Many observers believe the negatives interest rate era could force traditional investor to pour money into cryptocurrencies. After all, BTC is the best performing asset of 2019 and possibly of the decade.
Long-term technical studies are also biased bullish. For instance, the 100- and 200-period averages have produced a bullish crossover on the three-day chart. A similar bull cross in March 2016 was followed by a 21 month bull market.
The bullish view would be bolstered if and when prices exit the four-month falling channel seen on the weekly chart, confirming a resumption of the rally from lows near $4,000 seen in April.
That looks likely by the year's end, as the three-day chart MACD, which has a strong record of signaling big moves, has turned bullish for the first time in over three months.
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Stellar Preparing For Lift Off
XLM: Price: $0.085 | MCAP: $1.6 billion | 24-Hr Volume: $443.7 million
Short-term trend: Overbought/pullback
Favorable news for XLM has seen its value rise 24 percent over a 2 day period and is currently up 19.2 percent over a 24-hour period after an announcement from the Stellar Foundation on Monday (Oct. 4) declaring half the lumens in circulation were burnt.
With the burn, the total supply of lumens (XLM) has been reduced to 50 billion from 105 billion, with 20 billion currently in circulation, making it a more attractive investment based on the rules of supply and demand.
The daily RSI, however, is flagging a pullback in its recent rally witnessed Nov. 3 to Nov. 5, as conditions have now hit overbought and are likely to induce a sell-off to $0.074 in the short-term.
Long-term trend: Neutral
While market fundamentals have favored the short-term prospects, the long-term view remains neutral, until buyers can claim territory above former Sept. 19 peak highs at $0.093.
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| EDUCare Hurting Hard
EKT: Price: $0.12 | MCAP: $104.5 million | 24-Hr Volume: $8.1 million
Short-term trend: Bearish
EKT continues it devastating losses in the short-term as it opens in the red on its 5th consecutive daily candle, down 2.57 percent over a 24-hour period, EKT continues to suffer amid increasing selling volume.
The daily RSI is just shy of oversold conditions, now at its lowest point since August 29, hinting at a potential for a corrective bounce should prices hold along $0.12; Failing that would likely expose EKT to fresh yearly lows.
Long-term trend: Bearish
A major catalyst/development is needed to reverse the lower high lower low bearish trend that has plagued the ailing crypto since Oct. 16 and has failed to attract new investment resulting in its price discovery occurring at much lower levels.
A firm close back above $0.15 is needed in the long-term in order to shore up investor confidence and reverse the damage done over the last 22 days.
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A low-volatility squeeze or range bound action often paves the way for explosive price moves, according to market analyst Alex Kruger.
For instance, bitcoin was sidelined above $10,000 in the three weeks to Sept. 22. The range was breached to the downside on Sept. 23, following which prices fell to $7,900.
On similar lines, BTC witnessed a low-volatility range bound price action near $4,000 for weeks before breaking into a bull market with a big move to $5,000 on April.
Going back further, BTC's multi-week low-volatility cosolidation near $6,000 ended with a violent sell-off to sub-$5,000 levels in November 2018.
This time BTC is being squeezed squeezed between the 100-day and 200-day averages for the 11th straight day. The 200-day MA support is currently located at $8,127 and the 100-day MA resistance is seen at $9,587. More importantly, the range is getting narrow with each passing day.
A big move, therefore, could happen soon. That said, predicting the direction of the explosive move is always risky unless there is a fundamental reason. For instance, historical data shows BTC tends to pick up a strong bid six months ahead of the reward halving. The event is due in May 2020.
So, there is strong reason to believe that the ongoing consolidation could end with a bullish breakout.
Even so, seasoned traders would say that the best thing to do is to wait for a strong directional cue. Option traders, meanwhile, would feel tempted to initiate non-directional strategies like Straddle, which involves buying both call (bullish bet) and put (bearish bet). |
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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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Squeeze Continues