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Trade Recommendation: Ride the Next Rally of Bitcoin

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The profit taking period that saw the Bitcoin market fall from 19,697 to a low of 13,501 in a matter of a few days is almost up. The market appears to have generated a new higher low and will use that level to make its next move up.

Technical analysis reveals a large reversal pattern in the hourly chart that could signal the end of the correction. In addition, volume has been steadily decreasing. On Coinbase, volume spiked by as much as three times its average value in the hourly chart during the height of selling. In the last seven hours, however, volume has been way below its average indicating that bears have lot ammunition. More importantly, RSI in the hourly chart is far from overbought territory. This gives the market a lot of room to breach resistance at 18,000.

The strategy is to buy the market when it goes above 18,000. With signs of selling exhaustion, bears may not put up much of a fight the next time the pair breaches 18,000 on Coinbase. Also, the market has no stiff resistance above 18,000 so it has a clear path to our target of 22,500.

Hourly Bitcoin Chart on Coinbase

As of the time of writing, Bitcoin is trading at 17,200.

Summary of Strategy

Buy: breach of 18,000

Support: 17,200, 16,800, and 16,450

Target: $22,500

Stop: Move below 16,450

 

Disclaimer: The writer 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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3.7 stars on average, based on 253 rated postsKiril is a financial professional with 4+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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Bitcoin

Bitcoin Price Eyes Further Consolidation as Bakkt Sets Date for BTC Futures Contracts

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Bitcoin’s price has shown little movement over the last 24 hours, as low-volume, low-volatility trading supported a gradual consolidation for the world’s leading cryptocurrency. Meanwhile, the Intercontinental Exchange (ICE) has set a new date for the launch of Bakkt, a proprietary cryptocurrency trading platform.

BTC/USD Update

The bticoin price hovered within a narrow range on Tuesday, picking up where it left off at the start of the week. At press time, BTC was valued at $6,462.49, having declined 0.4% compared with Monday. The leading digital currency is trading at an $80 premium on Bitfinex.

Trade volumes have picked up slightly over the past 24 hours but remain well below $4 billion, according to CoinMarketCap. The $4 billion threshold is generally viewed as the minimum exchange-traded volume bitcoin needs to generate any kind of meaningful rally.

Bitcoin’s underlying volatility is once again approaching yearly lows. Over the past 30 days, the bitcoin volatility index has averaged 1.65%, according to bitvol.info. This figure conveys daily fluctuations in bitcoin’s open price.

According to CBOE Options Institute instructor Kevin Davitt, bitcoin has exhibited less price volatility than some of Wall Street’s biggest technology stocks. In a recent conversation with MarketWatch, Davitt explained how bitcoin’s 20-day historical volatility (HV) was lower than that of Amazon (AMZN), Netflix (NFLX) and Nvidia (NVDA). In fact, bitcoin’s 20-day HV has fallen nearly as low as Apple’s (AAPL).

ICE Sets Date for Bakkt

The owner of the New York Stock Exchange has set a date of Dec. 12 for the launch of its upcoming cryptocurrency trading platform. Bakkt will initially offer physically settled bitcoin futures contracts by mid-December, a move that could bring more institutional traders into the fold.

According to a notice issued on Monday, Bakkt’s new product is called the Bitcoin (USD) Daily Futures Contract. The contract size is one bitcoin, with prices quoted in U.S. dollars to two decimal places. A minimum price movement of $2.50 per bitcoin has been set. Block trades executed at a minimum of $0.01 per bitcoin are also permitted.

Investors who purchase a bitcoin futures contract will have physical units of the coin deposited into their account on settlement. Existing bitcoin futures markets offered by CBOE and CME are cash-settled as opposed to physically settled.

ICE’s first foray into cryptocurrency was announced back in August after it announced an ambitious plan to bring blockchain solutions to mainstream investors and consumers. The platform, which is backed by Microsoft, Boston Consulting Group and Starbucks, is “designed to serve as a scalable on-ramp for institutional merchant and consumer participation in digital assets, by promoting greater efficiency, security and utility,” according to CEO Jelly Loeffler.

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 649 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Analysis

Crypto Update: Coins Turn Lower After Choppy Weekend

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The major cryptocurrencies are slightly lower today in early trading, as Sunday’s modest rally faded away without major technical progress. Most of the coins are stuck in narrow trading ranges, and last week’s spike well above the current price levels, as buyers failed to take control of the market.

That said, we haven’t seen strong negative momentum either, and although the bearish long-term setups remain intact, there is no immediate danger of new bear market lows in the segment.

Patience is still the name of the game for crypto investors, since there is no evidence of a broader trend change that would justify a more constructive investment position. Our trend model is on sell signals across the board on both time frames, and the bearish pressures are still apparent on the charts, even considering the lengthy consolidation period. Given the negative long-term trends, odds still favor a test of the lows in most case, particularly in the light of the lack of bullish leadership.

IOTA/USD, 4-Hour Chart Analysis

While most of the majors are still above the lows hit just before the Tether-turmoil, there are several relatively weak coins that could lead the market lower in the coming weeks. Especially Ethereum, Liteocin, Dash, and EOS point a negative picture of the market, while Ripple and Bitcoin are still the most encouraging form a bullish standpoint, even as they also failed to signs of bullish momentum.


BTC/USD, 4-Hour Chart Analysis

Bitcoin is back near the $6400 level today, after drifting towards the $6500 resistance during yesterday’s rally,  but the coin is still well clear of the $6275 support level, trading clearly within last Monday’s range. Our trend model continues to be on a short-term sell signal, while the long-term picture is still neutral for the largest digital currency.

Traders and investors still shouldn’t enter positions here with further resistance levels ahead near $6750 and $7000 and with support levels below $6275 found near $6000, $5850 and between $5000 and $5100.

Altcoins Slightly Lower as Stellar Fails to Break Out

XRP/USD, 4-Hour Chart Analysis

Ripple and Stellar have been showing some positive signs last week, but they both failed to make significant technical progress, confirming the segment-wide selling pressure. Ripple is threatening to move below the $0.42-$0.46 level, despite the rally above its triangle consolidation pattern, and a break below $0.42 would likely trigger a test of the $0.355 support.

For now, the short-term sell signal remains in place due to the lack of follow-through, and traders should be cautious with new positions. Strong resistance is still ahead at $0.51, $0.54, $0.57, while further, weak support is found near $0.375.

Stellar/USD, 4-Hour Chart Analysis

Stellar is trading very close to the key long-term support zone near $0.24 that has been dominating trading for several weeks, and despite the rally attempts, the coin is still not out of its bear market. That said, should a broader trend change occur, Stellar would likely be among the leaders of renewed advance, but for now, traders and investors should still stay away from the coin.

The declining long-term trend is intact, with strong resistance levels ahead near $0.265 and $0.2835, while support levels are found near $0.235, $0.21, and $0.1935.

ETH/USD, 4-Hour Chart Analysis

Ethereum is still stuck in a very narrow range after the weekend, with the $200 support/resistance level still being in the center of attention. The bearish broader setup is unchanged in ETH’s market, with the coin still being relatively weak among the majors.

Traders and investors shouldn’t open new positions her, with further support found near $180, $170, and $160, and with strong resistance zones ahead near $235 and $260.

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 380 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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Bitcoin

Bitcoin Price Resumes Narrow Trading Pattern as Bulls Struggle for Momentum

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Bitcoin was back on the defensive Monday, as prices approached a key psychological support following a series of failed rallies last week. The leading digital currency by market capitalization is caught in a low-volatility, low-volume trading pattern that could keep prices firmly contained for the foreseeable future.

BTC/USD Update

The bitcoin price reached a low of $6,410 on Monday, according to CCN, before rebounding modestly later in the session. At the time of writing, BTC was down 1% at $6,473, according to CoinMarketCap. Prices reached a high of around $6,552 over the weekend.

Bitcoin continues to trade at a premium on Bitfinex, with the digital currency now offered at $6,587.

At current values, BTC is capitalized at $112.3 billion for a 53.7% share of the overall market. The combined value of all digital assets in circulation hovered near $209 billion at the start of Monday. Trade volumes across all cryptoassets reached $10.8 billion.

Low Volume, Low Volatility

Bitcoin’s price action has narrowed significantly over the course of the year, as the introduction of futures trading helped markets stabilize following an adrenaline-filled 2018. Although BTC continues to trade at roughly a third of its all-time high, it has carved out a firm price floor and has exhibited much lower volatility than in previous years.

The sharp decline in volatility can be highlighted by the bitcoin volatility index, which tracks daily fluctuations in BTC’s open price. Over the past 30 days, bitcoin’s volatility index has averaged 1.81%, according to Bitvol.info. This number represents the extent of BTC’s average fluctuation over that period.

Of course, the sharp drop in volatility isn’t all positive news, especially for day traders and speculators of virtual currency. For bitcoin, declining volatility also means a sharp drop off in daily trading volumes.

Daily turnover in BTC approached yearly lows on Sunday, hitting a low of around $3.1 billion, according to CoinMarketCap. For sustained rallies in bitcoin to occur, trade volumes of at least $4 billion are generally observed.

A lack of clarity on the direction of bitcoin and the broader market will likely keep price action limited over the short term. However, as we’ve observed repeatedly this year, prolonged periods of narrow trading ranges are often followed by sharp pullbacks in the market. This was observed earlier this month before a sudden selloff of Tether (USDT) propelled bitcoin sharply higher.

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 649 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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