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Bitcoin Price Defends Critical Support Following Pullback; Bulls Eyeing Reversal 

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Hopes of a bullish revival for bitcoin have not been lost in spite of the recent pullback, as the cryptocurrency continues to trade above a psychologically significant inflection point. The real test is whether bitcoin can maintain its holding pattern for the rest of the week as bearish headwinds subside.

Bitcoin Price Update

The bitcoin price stabilized Wednesday following a nearly 6% plunge earlier in week. The largest cryptocurrency by market cap has spent the majority of the trading session above $6,400, a level that proved difficult to penetrate following the most recent bear cycle.

More importantly, bitcoin is trading well above the psychologically important $6,000 support. Defense of this level in the coming days could ensure that the scale does not tip in favor of the bears.

Beyond this point, BTC shows no immediate threat of re-testing last month’s swing low of around $5,760.

At last check, BTC/USD was hovering around $6,410, where it was virtually unchanged compared with 24 hours earlier.

At the time of writing, upward momentum is being constricted by diminishing trade volumes, with turnover hovering below $4 billion. As Hacked previously reported, daily turnover of $4 billion or greater is commonly associated with higher prices. Volumes exceeded that critical level earlier in the day as prices rebounded from a daily low of around $6,320.

The broader cryptocurrency market remains in a holding pattern in anticipation of bitcoin’s next move. The total value of all cryptocurrencies in circulation was little changed at $253 billion following a deep $20 billion plunge on Tuesday.

Bitcoin Bulls Come Out in Full Support

Bitcoin’s prolonged downtrend has tested the resolve of its most ardent bulls, but for the likes of Tom Lee and Julian Hosp, there’s still plenty of reason to be optimistic.

Hacked reported last week that Tom Lee is maintaining his price target for bitcoin at $25,000 for the year. The Fundstrat co-founder was believed to have downgraded his position to around $20,000 before clarifying his outlook on national television. Lee maintains that bitcoin has historically traded at 2.5 times its mining costs. As the cost of mining a single bitcoin swells to $9,000 from the current level of $7,000, a price target between $22,000 and $25,000 is reasonable, according to Lee.

Meanwhile, TenX co-founder Julian Hosp is standing by his long-standing $60,000 price target. Citing positive regulatory developments, Hosp recently told CNBC he is “quite confident” that a prolonged uptrend is on the immediate horizon.

Interestingly, Hosp predicted last year that bitcoin will fluctuate between $5,000 and $60,000 in 2018.

The Forbes bitcoin price estimator is pegging end-of-year prices at around $10,000. Though significantly lower than what the bulls are saying, that represents an increase of 56% from current levels. The estimator calculates bitcoin’s future value based on multiple parameters, including transaction volumes and the number of users.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 609 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Bitcoin

Bitcoin Price Crosses 50-Day MA amid Seller’s Fatigue

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Bitcoin is charting a bullish reversal after an impressive Friday rally pushed prices back above the 50-day moving average.

BTC/USD Update

Bitcoin’s price clocked a high of $6,840.90 on Bitfinex Saturday, the highest in over two weeks. BTC was last seen trading at $6,678, having declined 1.2% from the previous session.

The leading digital currency shot up $400 on Friday after the U.S. Securities and Exchange Commission (SEC) announced it will delay a ruling on the highly touted VanEck SolidX Bitcoin Trust. The broader market was in a firm uptrend thanks to XRP’s triple-digit surge.

Bitcoin is now trading above the 50-day moving average, an important indicator for the bulls. Relative strength has weakened over the past 24 hours but remains in positive territory.

The bulls have a lot more work to do to ensure a stable recovery in the bitcoin price. Although BTC has successfully defended its key support, the market has been characterized by lower highs since mid-July.

At current values, bitcoin’s total market capitalization has risen to $115.2 billion. However, its share of the overall market has depreciated considerably. At the time of writing, bitcoin’s dominance rate was below 52%, according to CoinMarketCap. It recently peaked above 58%.

Classic Bottom?

Michael Novogratz, the billionaire investor and founder of Galaxy Digital, believes bitcoin is due for a strong comeback as “seller fatigue” takes hold.

Speaking at the second annual “All Markets Summit” hosted by Yahoo Finance, Novogratz said crypto assets will be back on the upswing following the boom-and-bust cycle of the last two years. According to Galaxy Digital’s cryptocurrency index, the market has experienced a “classic bottom” that will make the top-ten coins more attractive in the foreseeable future.

“Bitcoin has held $6,000. Yes, it is off its highs, but it has established itself as a store of value,” Novogratz said, as quoted by Reuters.

The $6,000 price point has proven to be a formidable support zone for bitcoin as it is commonly cited as the break-even point for miners. The launch of bitcoin futures in December has also contributed to a sharp decline in volatility – albeit incremental – which appears to have set the price floor at or around $6,000. Although the market has breached this level on multiple occasions, each breakdown proved to be short-lived.

In terms of institutional adoption, Novogratz believes there are sizable sums of money currently waiting to be invested. This view conforms with the business strategy being employed by Coinbase, one of the world’s largest cryptocurrency exchanges, which has developed new custody services to attract institutional investors. Coinbase believes there is currently $10 billion in institutional capital sitting on the sidelines.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 609 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Analysis

Crypto Update: Market Stabilizes as Ripple Craze Fades

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The major cryptocurrencies had crazy Friday, with the skyrocketing Ripple in the center of attention. XRP more than doubled in 24 hours, and the coin was up 3 times off its low from earlier this month before entering a correction in the second half of the day. Ripple briefly took over Ethereum as the second largest coin by market capitalization, even as ETH also hit an almost three-week high amid the broad rally in the segment.

XRP/USDT, 4-Hour Chart Analysis

XRP settled down above the $0.50 level near the market cap of ETH, but short-term the coin is severely overbought, and a pullback to the $0.42-$0.46 zone is still very likely even if the coin manages to hold on to its stellar gains and enter long-term rising trend. For now, a long-term trend change is not confirmed, despite the huge bullish move, with most of the segment still being in bearish long-term trends.

That said, the short-term buy signal is still intact in our trend model, and should the overbought readings get cleared, traders could enter new positions again. Support levels are found near $0.54, $0.51, while resistance is ahead near $0.57, $0.64, and $0.75.

BTC/USD, 4-Hour Chart Analysis

Bitcoin got up to $6750 yesterday, but so far, it failed to overcome the resistance zone near that price level, and the coin is now trading in a shallow short-term correction. BTC needs to stay above the $6500 support to maintain the break-out that followed Ripple’s surge and to remain on a buy signal in our trend model.

The fact that correlations are still declining between the coins is a positive sign, but the overall bearish picture in the segment and Bitcoin’s proximity to the key long-term zone still warrant caution here. Further resistance zones are now ahead near $7000 and between $7200 and $7300, while support below $6500 is still found at $6275, $6000, and near $5850.

Altcoins Pull Back with Ripple, Short-Term Setup Still Promising

ETH/USD, 4-Hour Chart Analysis

Ethereum finally broke above the key $235 support/resistance level thanks to yesterday’s broad rally, and the coin reached the next major resistance zone near $260 as expected after the bullish move. Now the dominant declining trendlines are not far away, so traders should reduce their positions, since the long-term trend is still clearly bearish.

A test of the lows is still in the cards in the coming weeks, and the coin remains on a long-term sell signal despite the short-term rally.  Support is found near $200, $180, at the low near$170, and at $160, while further resistance is ahead between $275 and $$280 and at $300.

Stellar/USDT, 4-Hour Chart Analysis

Stellar was among the strongest coins during yesterday’s rally, following Ripple higher, but now it is testing the key support/resistance zone between $0.2375 and $0.25 after entering a correction together with the broader market.

That said, the break-out is intact in Stellar, and traders could hold on to their positions here. Support levels are found near $0.21, $0.1930, and $0.1830, while further resistance is ahead near $0.2650 and $0.2850.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 351 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Analysis

ETFs: What Is The SEC  Really Thinking?

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As a veteran Wall Street type, I was not surprised at Thursday’s SEC announcement on the VanEck-SolidX Bitcoin ETF.  Once again they gave a “no decision”. This pushes the deadline back to December 29, 2018. Don’t be surprised if New Year’s Eve comes and goes and nothing happens before the SEC is forced into a action by the end of February.

Back in August, when the first delay was announced, crypto investors’ reaction was swift and painful.  On Thursday, after a temporary hiccup, prices took a surprisingly positive turn. If we are to believe for just a moment that crypto prices act rationally (or just occasionally) then comes two obvious questions, are crypto ETFs good or bad? Secondly why can’t the SEC come up with an answer?

Never Say Yes

Let’s start with the easy question first: what’s up with the SEC?  Having dealt with this teflon organization for over 30 years, their actions with regard to VanEck-SolidX are the same pattern they have followed forever.  Practically never do they approve anything. Instead they provide two choices: reject or delay. By delaying the VanEck-SolidX application they are accepting the ETF concept in principle but laying out objections that must be corrected.

The result of this regulatory song and dance, don’t expect a decision until the last minute. The reason is that the main issues are not likely to be resolved in time. In fact, I doubt that the ETF proposal gets approval for perhaps as much as another year.  Here is why.

SEC Speak: Obfuscation

According to Jake Chervinsky, attorney for VanEck, the SEC asks “18 multiple part questions covering seven pages.” He adds: “It’s not encouraging to see the SEC ask if the bitcoin futures markets are “of significant size” despite having already concluded last month that they’re not.”

This is a tactic in obfuscation that the SEC loves when an applicant has not provided an adequate response.  In this case there is no objective answer to how liquid a market must be to meet the measure of significance.  Moreover, there is little or nothing that can be done in the short run to create greater liquidity.

The SEC is a political body as much as any agency of the Federal Government.  In raising the issue of liquidity, they can stand behind their role of protecting the public without at the same time hindering public access to a class of assets, even at current depressed levels, is worth $200 billion, more or less.

The SEC Is Right With Their Delays

Does the crypto world really benefit, as this stage of its evolution, by fostering a group of ETFs?  The argument in favor says that this is the way to simply and safely offer the individual investor a way to participate in a diversified portfolio of crypto.  That sounds noble – or is it just something that makes lots of money for those who create them?

But so far, at least from the viewpoint of the SEC, ETF applicants have not created a more secure domain.  More importantly, even if this were not the case, what does the investor gain from investing in a diversified list of crypto when Bitcoin overshadows about every other altcoin?

With nothing against those that believe in the benefits of ETFs, the benefits in current terms is far better for the ETF sponsor that it is for the investor.

Looking just at the math, an individual investor could be just as well off buying Bitcoin, Bitcoin Cash, Ripple, Ethereum and EOS. Admittedly, it is somewhat more complicated finding a place to buy and store Ripple, but with this small portfolio, you cover 75% of the entire crypto asset class. If security is an issue simply go to  blockgeeks.com/cryptocurrency-safe/ and select from a list of hardware wallets.

So whether the SEC gives their approval of VanEck-SolidX in December or February might make a difference if this were 2020 or sometime thereafter.  As for now, it really isn’t critical to the mass acceptance of crypto.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.4 stars on average, based on 106 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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