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On Slippery Grounds
BTC: Price: $9,150 | MCAP: $166.14 Billion | 24-Hr Volume: $22.77 Billion
Short-term trend: Bearish
Bitcoin is looking heavy, as repeated rejection at a four-month descending trendline observed over the last few days indicates the bullish sentiment generated by recent rally from $7,500 to $10,350 has likely evaporated.
The upper shadow of the monthly candle is representing rejection above the descending 5-month moving average. A failure to hold above descending averages usually translates into a notable price drop.
BTC, therefore, risks falling to immediate support at $8,800. A violation there would expose $8,500. Monthly chart indicates a major support is directly located near $8,000. The bearish case would weaken above $9,500, although, as of now that looks unlikely.
Also, drop to $8,000, if any, could be short-lived, due to below mentioned fundamental factors.
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 three-day chart MACD, which has a strong record of signaling big moves, has also turned bullish for the first time in over three months.
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Tezos Goes Wild With Exchange Listing
XTZ: Price: $1.23 | MCAP: $780.2 million | 24-Hr Volume: $58.1 million
Short-term trend: Bullish exhaustion
OKEx's decision to list the worlds 17th largest crypto by market cap, Tezos, on Nov. 7 has been met with extreme volatility as prices peaked at $1.90 before a violent rejection dragged it back beneath $1.25.
The daily RSI (not shown) hints at buyer exhaustion in the short-term, coupled with a large daily candle topside wick, the rally appears to be nearing its end.
Caution is warranted when more volatile periods occur, as evidenced by XTZ's 13-minute, 50 percent price rally then subsequent sell-off.
Long-term trend: Neutral
The long-term trend remains neutral until today's candle close finishes up above prior peak highs located at $1.17, hinting at a potential continuation, post consolidation. Conversely, should prices fall below recent lows witnessed at $0.90, expect a deeper drawdown to $0.75.
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Bytom Continues to Slide
BTM: Price: $0.1230 | MCAP: $126.4 million | 24-Hr Volume: $29.5 million
Short-term trend: Neutral
BTM entered its second day in the red on Nov. 6 as its price moved toward former resistances at $0.1215, whereby closing below could have spelled an end to the recent bullish rally witnessed Oct. 25-Oct. 28.
There is hope for the bulls to hold the former resistance as evidenced by today's daily candle flipping resistance to support as the bulls take another leg higher.
Falling volume on a falling price could also signal an end to the sell-off soon, but will need to be observed above $0.12 as this would provide incentive for one more rally to test recent highs at $0.1485.
Long-term trend: Neutral
The long-term trend remains neutral given Oct. 28's wick high was rejected with conviction leading to a large market sell-off during the same trading period. Conversely prices are yet to have formed a new peak low, leading to expectations of a potential bottoming out at $0.12.
Both the daily RSI and awesome oscillator (AO) are trending bullish, but may flip bearish in the mid-term should they pass below 50 and 0 respectively. If this occurs, consider the bias to have changed with confirmation from bullish to bearish in the long-term.
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Total open interest in Bakkt's bitcoin futures market has crossed $2 billion, according to Skew Markets.
Open interest (OI) represents number of active contracts at the end of the day and should not be confused with volume, which refers to the number of contracts traded in a given period.
For instance, if Mr. A buys 10 bitcoin futures contract, the open interest is 10. Mr. B also goes long by buying six contracts, pushing open interest higher to 16. If Mr. C is a bear and goes short 3 contracts, OI again increases to 19.
The tally would drop to 18 if Mr C squares off one short contract. On similar lines, if Mr. A sells his 10 contracts, open interest will drop to 8.
The OI, therefore, is considered as a barometer of market sentiment. A rise in open interest along with an increase in price is said to confirm an upward trend. Similarly, an increase in open interest along with a decrease in price confirms a downward trend, according to investopedia.
The crypto market community closely observing the the growth in Bakkt's open interest, as it's physically-backed futures (contracts holders are delivered with physical bitcoin) may affect price over the long run.
While the recent rise in Bakkt's OI is encouraging, it is still a miniscule compared to what is seen on BitMEX. The margin trading platform had four times more OI earlier this month. |
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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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Tiptoeing Lower