Bitcoin Looks North
BTC: Price: $8,270 | MCAP: $148.95 Billion | 24-Hr Volume: $16.81 Billion
Short-term trend: Neutral
Bitcoin bounced up from key Fibonacci retracement support of $7,850 over the weekend, neutralizing the immediate bearish setup. Now, a break above the bearish lower high of $8,820 is needed to put the bulls in a commanding position.
That level could soon come into play, as the 50-hour moving average (MA) has crossed above the 200-hour MA, confirming a golden crossover – a bullish setup.
The MA crossovers on the hourly and other short duration charts follow prices more closely and are thus more reliable as trend indicators as opposed to their daily and weekly chart counterparts, which lag price and often work as contrary indicators.
Backed by an above-50 print on the relative strength index (RSI), the golden cross has bolstered the bullish setup, as represented by Monday's inverse head-and-shoulders breakout.
Also, indicators like the MACD histogram are reporting seller exhaustion on the three-day chart. The bullish case would weaken if prices fall back below $8,000, although as of now, that looks unlikely.
Long-term trend: Bullish
Bitcoin's long-term outlook is bullish, as mining reward halving is due in May 2020. The bullish case looks 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.
Technical charts, however, are reporting conflicting signals. To start with, 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 case, however, looks weak on the longer duration charts. Bitcoin closed below $9,049 on Sept. 30, confirming a bearish inside bar candlestick reversal on the monthly chart.
The cryptocurrency had charted consecutive inside bar candlesticks in July and August, indicating indecision or consolidation.
The tug of war between the bulls and the bears ended with a 20 percent drop in September. Further, the weekly relative strength index is now reporting bearish conditions with a below-50 print.
The bearish candlestick arrangement takes precedence over the bullish crossover on the three-day chart, as the latter is a lagging indicator. Furthermore, the cryptocurrency was sidelined for weeks following the March 2016 bull cross and the bull market had resumed at the end of May 2016.
Put simply, BTC could suffer a deeper drop to $7,200, as suggested by the monthly chart, before resuming the bull market.
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Chainlink Flashing Green For Third Straight Day
LINK: Price: $2.73 | MCAP: $955 million | 24-Hr Volume: $155 million
Short-term trend: Bullish
Chainlink, ranked 15 as per market value on CoinMarketCap, is currently reporting 4 percent gains on a 24-hour basis.
Notably, the cryptocurrency is flashing green for the third straight day and will likely remain better bid in the short term, as the daily chart is reporting a bull flag breakout, a continuation pattern which accelerates the preceding rally.
The flag breakout has created room for a rally to $3.80 (target as per the measured move method). On the way higher, the cryptocurrency may encounter resistance at the recent high of $2.98.
That level will likely be put to test in the next few days, as the flag breakout is backed by an above-50 reading on the 14-day relative strength index. Further, trading volumes jumped above the descending trendline on Monday, validating the price breakout.
Long-term trend: Bullish
A higher low established at $2.18 earlier this month indicates the path of least resistance is to the higher side. The 14-week relative strength index is also reporting bullish conditions with an above-50 print. The bullish outlook would be invalidated if prices drop below $2.18, although as of now, that looks unlikely.
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| Decred Hits Record Low
DCR: Price: $14.00 | MCAP: $150 million | 24-Hr Volume: $6 million
Short-term trend: Bearish
Decred's bitcoin-denominated exchange rate has dropped to a record low of 1710 sats on Binance.
The 14-day relative strength index (RSI) is reporting oversold conditions with a below-30 print. In fact, the indicator has also hit record lows near 20.00.
Even so, the outlook remains bearish, as there are no signs of seller exhaustion on the price chart. The oversold reading on the RSI would gain credence if and when candlestick patterns like Doji, Bullish Engulfing or Morning Star emerge on the daily chart.
Long-term trend: Bearish
The path of least resistance will remain to the downside as long as prices are held below the trendline falling from April's high. As of writing, the trendline resistance is located at 2150 sats.
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Bitcoin is yet to build a reputation as a safe haven asset like gold. The users of top cryptocurrency, however, experience a greater degree of freedom than the yellow metal.
This is because bitcoin's decentralized peer-to-peer setup allows users to process transactions through a private network of computers linked through a shared program.
More importantly, government authorities, banks and other regulators cannot interrupt transactions or freeze bitcoin accounts.
This is in stark contrast to gold, a hard currency, which cannot be moved freely across political borders. Moreover, governments often impose restrictions on the amount of gold that can be purchased from across the border or impose heavy import duties.
For instance, the Indian government on April 1, 2016 stated that all male passengers coming back to India from Dubai or other places can bring gold jewelry up to 20 grams but not costing more than 50,000 Indian rupees as a duty free allowance, according to the Times of India.
Put simply, bitcoin could turn out to be a better medium of exchange in the long run. Also, the premier cryptocurrency's appeal as a haven asset may strengthen as and how its mainstream adoption rate rises. |
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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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