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Keith Wareing

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The price of Bitcoin has been testing $10,000 support the entire weekend but did the futures gap finally get filled by a chart candle downwick?

The markets are bleeding out. Ether (ETH) dropped from $500 to $300 in a matter of days, people are screaming that the DeFi bubble has burst already, and are crying about their favorite “[insert food name] coin” crashing in value after a one-month-old Twitter account rug pulled 38K ETH from investors.

Yes, it’s just another week in crypto, but did anyone else notice that Tron (TRX) was pumping amidst all this?

Might just be a coincidence, but the last time this happened so quickly the entire crypto market bled out in the long, cold crypto winter.

The Bitcoin “Bart” top

BTC/USD 4-HOUR chart. Source: TradingView

Bitcoin has shed 21% of its dollar value after dropping from $12,500 to sub $10K levels in just two weeks, leaving the popularized “Bart” pattern staring us in the face.

But when the leading digital cryptocurrency by market capitalization makes such a dramatic move, it pulls (for the most part) every other crypto asset down with it.

The top of this particular chapter in the history of Bitcoin was about $12,500, with many now questioning where the bottom could lie. So in this week’s analysis, I will look at three potential scenarios of how to identify the bottom.

The CME gap

BTC1! CME 4-hour chart. Source: TradingView

Most seasoned Bitcoin traders are aware of the CME gap, for those yet to be exposed to this sorcery let me explain. Bitcoin is a 24/7 tradable asset. The CME, however, is only actually open 23 hours per day, beginning Sunday evening at 5∶00 pm Central Time and ending at 4∶00 pm CT Friday afternoon.

This means there are windows where gaps can occur, typically these occur on weekends when the market closes on a Friday and reopens on a Sunday evening. However, traders can still trade the asset 24/7 using what the CME refers to on their website as the following:

“Rule 526, and EFRPs (Exchange for Related Position), pursuant to Rule 538, may be negotiated/executed 24/7 and must be submitted for clearing during the appropriate clearing session.”

This means that orders can still be placed when the market is closed as far as the charts are concerned, which means orders can get left unfilled, and this is where the gap comes in.

The most recent gap occurred on Aug.13. This was a Thursday, so when the CME closed for one hour when Bitcoin was trading at $11,715, it reopened at a price of $11,765. This $50 move is what created the gap. So as Bitcoin rose to $12,635 on the CME chart, there may have been orders left unfilled from $11,715.

As the price fell past the gap price on Aug. 19, 2020, the gap is then considered “filled” and one can only assume that orders left behind at this level were then filled.

However, the price of Bitcoin has continued to bleed out, and we have printed a new local bottom of $9,905 on the CME chart, which is now just $240 shy of filling a gap left on July 24.

This is where it gets rather opaque. The gap range on July 24 is between $9,665 and $9,925, leaving the question of whether the gap must still be filled? Or whether the gap partially filled.

As the wick entered the gap range, it did not reach $9,965, thus not closing the gap entirely. Does this mean there are still orders waiting to be filled at $9,665?

We don’t know, and this leaves some speculators believing the gap has been filled, and another camp believing it is yet to be filled.

The weekly Fib paints $7K levels as support

BTC/USD 1-week chart Source: TradingView

Moving aside from the CME magic, technical traders are already eyeing up $7K areas as support. One analyst @officiallykeith (*ahem* that’s me btw) tweeted on Sep. 4:

“Losing the .618 on the weekly of $7033 I will maybe realize my dream of owning nothing.”

Shortly after the same levels were echoed by popular trader Scott Melker (@scottmelker), who said:

“Point to remember – from here, a retrace to the low $7000s would still be considered “healthy,” hitting a 61.8% golden pocket retracement before heading to new highs. That would actually be considered “normal” after the move from the March lows. Would scare everyone.”

Whilst the prospect of hitting the 0.618 Fibonacci level might frighten many people, the more seasoned Bitcoin hodlers amongst us such as @Davincij15 were quick to assure crypto twitter that this is all part of the game. He noted:

“9 1/2 years ago…

I got #bitcoin at $1 and kept buying up to $32, then watched it drop to $2! Also watched bounce between $5 and $7 for 2 years.

Still held, still bought, still here, still strong!”

A reminder to us all that neither hodling nor trading Bitcoin is going to be easy, but to date, it has seldom been wise to bet against Bitcoin. As such we now have two potential bottoms in sight, $9,665 or around $7,100.

However, there is a third less-conventional indicator that might hold the answer…

“The Trondicator”

TRX/ETH 1-week chart. Source: TradingView

So let’s talk about Tron for a second. My last 10x trade of the 2017 bull market actually happened at the beginning of 2018, and that was on TRX.

We all know what happened after January 2018. The crypto bear market was thrust upon us, and altcoins started heading toward zero. But what is interesting about Tron and, in particular, its chart history, is that whenever Tron prints a candle with a wick near enough the same size as the candle itself, strange things happen to the crypto space as a whole.

This isn’t immediately noticeable on TRX/USDT charts, as Tron started life as an ETH pairing. So when you look at the TRX/ETH chart on the weekly, you start to see a pattern clearer than the Bart we are looking at on today’s BTC chart.

The first time we saw this type of longtail pump candle, the bear market started. The second time it happened was the week commencing Jan. 7, 2019, followed by a longtail dump candle on Feb. 4, 2019 — the exact period that Bitcoin found its bottom around $3,300.

So here we are again, the Aug. 30 weekly candle is a green long-tail candle on Tron and the markets are all going to pot. So maybe, just maybe, the bottom will be signaled when Tron prints another candle with a wick equal to the size of its body again.

The bearish scenario for Bitcoin

If Bitcoin fails to hold the CME gap support of $9,665, I’ll be looking at the weekly Fibonacci levels for support. These lie at the following levels: the 0.382 at $9,190, followed by the 0.5 fib at $8,168, with the absolute safe correction level being 0.618 around $7,146.

Losing the 0.618 would pretty much signal that we’ve had our bull market, now it’s time to keep an eye on the Trondicator.

The bullish scenario for Bitcoin

The CME gap effect is very real. I have witnessed first hand an immediate price correction after the CME gap has filled. As such, since the gap has partially filled, we may have already seen the bottom. The first bullish sign would be closing above the 0.236, which is around $10,454. Should BTC hold this level, then I expect the bull market to resume.

Author: Keith Wareing

Source: Coin Telegraph: Can Bitcoin go below $10K again? The ‘Trondicator’ may have the answer

Several signs are pointing to a new bear market for Bitcoin as mining chip manufacturers are feeling the pinch from the halving and the global economic downturn.

Bitcoin (BTC) has failed to challenge the multi-year resistance of $10,500 since the beginning of June 2020. This extended period of chop will ultimately result in one of two inevitable outcomes.

Either a massive green candle to catch bears off guard or a period of profit-taking that will see the leading digital crypto-asset fall to sub $8K levels in the coming weeks.

But what signs can we look out for to determine which direction the largest cryptocurrency by market capitalization will go?

The “Weakly” MACD

Using the Moving Average Divergence Convergence (MACD) indicator, which on the weekly chart has historically proven to be an incredibly accurate indicator for buying and selling Bitcoin, you can see that the blue MACD line is starting to point down toward the orange signal line.

Whenever the weekly MACD does this, it signals to investors and traders to either sell or short. In the early history of Bitcoin, both bullish MACD crosses (when the blue MACD line crosses up through the orange signal line) and bearish MACD crosses (what we’re seeing now) were infrequent — they would occur once a year maybe twice.

BTC/USD 1-week chart. Source: TradingView

However, in the last 18 months, they crossed nine times, that’s once every two months on average since the beginning of the 2018 bear market.

The last time Bitcoin crossed bearish on the MACD there was a whopping 57% decline in the price of Bitcoin almost immediately after they crossed. So are we in store for yet another pullback? According to the Fibonacci levels, this could put downside targets anywhere between $7,916 and $3,850.

Bitcoin’s valley of death

BTC/USD 1-day chart. Source: TradingView

On the daily chart, things are not much clearer. It’s evident from the chart that $10,400 is the resistance and $8,800 is the support. How long this range continues is anyone’s guess.

However, the last time Bitcoin broke through this level, the price soared by a further 32.2%, at which point $10,400 became support several times before eventually continuing its downtrend.

Right now, Bitcoin is dangerously close to the support level, which happens to be the 236 Fib. Losing this level opens up $7,900 as the first downside target.

Conversely, should the bulls take control and push past the $10,400 resistance level, the upside from the current price of $9,040 is a staggering 56%. Quite the trade if you can pull it off, but one that first needs to wait for confirmation, and this could take not weeks, but months to play out.

Short-term relief for Bitcoin

BTC/USD 1-hour RSI chart Source: TradingView

On a more positive note, the 1-hour relative strength index (RSI) indicator shows that buyers stepped in as it approached oversold territory around 31.40. Keep in mind, that anything below 30 is considered a strong buy signal.

However, on the higher time frames between the 12h and monthly charts, the RSI is very much in the middle, providing no clue as to which way the market is going to go. Either the bulls will take charge and push up BTC price 50% or the bears will drive the price down by an equal percentage.

There is quite literally nothing on the charts that can give an indication with the exception of the bearish MACD. However, sideways action can cause the MACD to cross if it lasts long enough.

Big ASIC mining producers are hurting

ASIC producers’ market share. Source: BitMEX

In a recent report published on the Bitmex Blog entitled “Battle for Asic Supremacy,” you can see that the previous leaders in ASIC production such as Bitmain are losing their dominance. Having once occupied a 75% market share, new stars like MicroBT are fast becoming the new dominant force in this space.

But with mining rewards recently being halved, this particular industry looks somewhat like a financial black hole. For example, Canaan’s share prices tanked by nearly 50% shortly after a $90m IPO last year, and relative newcomers Ebang are seemingly desperate for cash after having their Hong Kong IPO rejected in 2018. Now, these firms are seeking a cash injection on United States’ soil after recently filing for a U.S.-based IPO in April 2020.

The unsurprising lack of financial interest in these companies will almost certainly be playing a role in the current price of Bitcoin.

The question this leaves me with is this: “if no one is making any money from Bitcoin, what happens next?” Is this a bullish or bearish thing? To me, the answer seems obvious, it comes across as very bearish.

Bullish scenario

BTC/USD 1-hour chart Source: TradingView

Using the current Fib levels on the hourly chart, the key levels to claim are the 618 at $9,420 and the 100% at $9,800. After $9,800, the last area of heavy resistance sits at $10,400.

Bearish scenario

Using the same chart and Fib levels, $8,800 is where the first level of support will be found. Losing this level at this stage of the game would open up the 382 on the daily chart, which sits around $7,600.

Author: Keith Wareing

Source: Coin Telegraph: Bitcoin Price Consolidating But What Happens if $9K Support Is Lost?

As Bitcoin’s price continues to range sideways, the momentum may be shifting to XRP for the next big move.

Bitcoin’s (BTC) sideward price action of late has been a hunting ground where whales can easily liquidate misinformed traders on leverage trading platforms. Without decent swings, any asset can become boring.

But let’s not forget BTC isn’t the only cryptocurrency out there, as several altcoins are currently staging somewhat of a comeback. However, there’s one coin that doesn’t seem to be having a good time lately, namely XRP, the fourth-largest digital asset by market capitalization.

So, in today’s analysis, I’m going to look at whether holding XRP is likely to be more fruitful than BTC in the short term.

The bigger picture for Bitcoin

Starting out with the weekly chart, one can see why the bears favor this timeframe. Bitcoin is forming a massive pennant that is far clearer now than it was before the March 12 black swan event.

BTC/USD 1-week chart. Source: TradingView

Typically, pennants break toward the end of the pattern, sometimes a little before. However, they are invalidated after. As things stand for Bitcoin, a breakout or breakdown could occur any time between now and approximately September 2021, 14 months from now.

With the current price around $9,156, a small 6% increase would put Bitcoin on the resistance line, and this is why we have failed to reclaim $10,000. But at this rate, reclaiming just $9,750 would be a welcome breakthrough for the bulls.

On the flip side, there is a massive 47.42% gap from the current price to the support of the pattern. This puts a figure of $4,500 as a potential target, which may be a great opportunity to stack some sats. But is this just wishful thinking from overly aggressive bears that shout “burn this Ponzi to the ground?”

More bearish news for Bitcoin

BTC/USD one-day chart Source: TradingView

The one-day chart can be interpreted as equally bearish for Bitcoin. Using the Fibonacci retracement tool from the March 12 dump to the last time $10,500 was rejected, the price is still above 0.236. But should this level fail, then the 0.382, 50%, and 0.618 Fibs are where the action is, and this puts support levels at $7,900, $7,150 and $6,350, respectively.

While none of us hodlers want to see $6,350 or $4,500 Bitcoin, you can’t ignore the charts. However, the bull in me sees that just a 13% uptick in the price of Bitcoin is needed in order to reach the multiyear resistance of $10,500.

So, what is more likely? Number go up? Or number go down?

Short-term resistance for Bitcoin

BTC/USD one-hour chart Source: TradingView

In the short term for Bitcoin, and using now the one-hour chart as well as the Fib levels from the tip of the June 23 pump and the $8,800 bottom on June 27, we can see that Bitcoin has broken the 382 (as I type this article). Thus, following the Fibonacci structure would put the most likely resistance levels at $9,300 on the 50% Fib and $9,420 on the 618.

Should Bitcoin continue on an upward path, reaching the top of the Fib at $9,794 would invalidate the pennant structure and also wipe out the chance of $4,500 to boot.

Once the bulls are in control, then $12,000 Bitcoin is the next key level to break, and when all is said and done, this is still only a 25% increase in price. Which brings me to Ripple’s XRP, an altcoin that has piqued my interest.

XRP is the new XRP

XRP/USD one-week chart. Source: TradingView

At first glance, the XRP chart looks like any other altcoin. A huge 2017 spike followed by a monster downtrend. Anyone that looks at this chart would draw the same conclusion that this project is dead.

But is the fourth-biggest digital asset by market cap really dead? Or is it the investment opportunity of a lifetime?

Using the Fib with a massive pinch of salt, the first target being the 382 is $1.33. With XRP currently trading at about $0.175, that’s approximately a 750% return on investment. If the price continued to the 50% retracement, then that’s 900% and a massive 10-times gain if it were to reach the 0.618 level.

I like those numbers, and since XRP is somewhat of the “Ralph Wiggum” of crypto, responding rather slowly after Bitcoin and Ethereum make their moves and remaining stagnant for the majority of 2017, this could be a great speculative investment as Bitcoin looks like it’s close to its top.

The downside for XRP

XRP/USD 1-week chart. Source: TradingView

Moving down to the one-day chart for XRP, the downside doesn’t look that great. If $0.16 support fails to hold, $0.10 XRP is what the Fib retracement tool shows as a potential target.

However, there is massive buying and selling pressure for XRP on Bitfinex, between $0.17 and $0.18 with no big orders below $0.17, according to the Tensorcharts orderbook heatmap.

XRP/USD heatmap. Source: Tensorcharts

This all leaves me asking the question: Is the bottom in for XRP? But also, are we close to the top for Bitcoin?

Obviously, XRP hasn’t won as many hearts and minds as BTC, as it’s generally discounted by the crypto community due to its centralized nature, Ripple’s regular monthly sales from its escrow and its “XRP Army” supporters.

Nevertheless, XRP is currently at mid-2017 levels, while Bitcoin is already at December 2017 prices. So, which horse looks better to bet on at these levels? Obviously, you should DYOR — do your own research. But as Warren Buffet once said, “Be fearful when others are greedy and greedy when others are fearful.”

Bullish scenario

For Bitcoin, the first level of resistance is at $9,450. However, should we break this, then $9,750 is where bulls need to push toward to regain control.

Bearish scenario

Defending $8,900, which is the 236 Fib, is massive for Bitcoin right now. Should this level fail, I would be looking at $7,900 as a very real target should the bears win this battle.

Author: Keith Wareing

Source: Coin Telegraph: XRP Price Can Outperform Bitcoin in the Short Term — Here’s Why

Five signs are pointing to Bitcoin being in a bull market despite its inability to break through the multi-year resistance at $10,500.

Bitcoin (BTC) price has been sideways for several weeks with now over a month since the halving. This is very much reminiscent of early 2017 when Bitcoin hit $1,180 for the second time, triggering a catastrophic sell-off causing the top-ranked cryptocurrency to fall by nearly 40% in a single day.

It was over, Bitcoin was declared dead, and what happened after is the first sign that we were in for a bull market.

First sign: the trap

BTC/USD 1-day Chart TradingView (2017)
BTC/USD 1-day chart TradingView (today)

Having studied the charts for repeating patterns, you can see that the pattern that played out after the 40% dump from $1,180 in January 2017 is almost identical to that of the 57% dump that occurred on March 12, otherwise known as Black Thursday.

On both occasions, the price recovered to the pre-dump levels and shortly after an M pattern, typically signaling a bearish double-top.

However, what is different about the M pattern in 2017 is that the end of the M was actually the beginning of a W. Not quite a double bottom, but what came next was a 2000% rise in the value of Bitcoin.

Right now in 2020, we are seeing the same pattern play out. The only question is where is the bottom of the W? Is the bottom in? Or are we expecting another small pullback?

Second sign: the range

BTC/USD 1 hour chart Source: TradingView

June 11 saw a breakdown from the ascending channel that was forming since the black Thursday dump. It was inevitable that a pullback was due after such a huge recovery.

10 days on and we’re seeing a new descending channel opening up that has perfect Fibonacci levels lining up.

The upper part of the channel, which shows resistance at around $9,600, sits perfectly on the 618, and the midpoint of the channel shows a level of support is on the 236 fib at $9,168.

However, while this isn’t something that may seem like the sign of a bull market on face value as far as the charts are concerned, what is interesting is the relevance of the 50% fib which sits around $9,470, and the support of the channel at around $8,635, as these levels become something of a highlight when you look at the orderbook heat map.

Third sign: the orderbook

BTC/USD heatmap chart Source: Tensorcharts.com

Taking a look at the Binance order book on Tensorcharts and you can see that there are significant sell-orders as denoted by the yellow line around the 50% fib at $9,450 and interestingly a lot of buy orders around $8,800, and another batch at the bottom of the descending channel at $8,696.

There are two things that this tells us: resistance is at $9,450 and support is at $8,700. However, with the current sidewards chop, and the equally matched buyers and sellers, it doesn’t take much for whales to spoof the orderbook to force the market in their favor.

As such, placing large sell orders at $9,450 in order to scoop up some more sats at $8,700 almost looks like too much of an obvious play. But if you spend enough time watching the charts and the orderbook, you will notice that by doing this, it’s easy for whales to accumulate on leverage exchanges.

As the shorts pile in targeting $8,700, the spoofers can take a large long position, remove their $9,450 sell-wall and scoop up all those liquidations — something that is particularly easy to do on the weekends when the volume is thinner on spot exchanges.

But while this isn’t a sign of a bull market, it is a sign of accumulation, and what follows after is a bull market.

Fourth sign: altseason

Total CryptoCap monthly chart. Source: TradingView

In case you missed it, the long-awaited “altseason” is seemingly upon us. Taking a look at the total crypto market cap chart, we can see that after a 22-month downtrend, the Moving Average Divergence Convergence (MACD) Indicator has flipped bullish.

The first green candle on the histogram combined with the bullish MACD cross is a clear sign that momentum has returned to the overall crypto market. Since doing so, several top-100 coins have experienced massive gains such as ZIL, for example, which recently surged by 300%.

History tells us that when altcoins run, smart money sells back into Bitcoin — rinse and repeat this process a few times and the super cycle occurs. But what drives this madness? Well, that would be thanks to the crypto influencer space, and that brings us to the fifth sign.

Fifth sign: crypto influencer IQ is at an all-time low

Some of you may or may not know this, but I personally thrust myself in the crypto scene in 2016 on YouTube, and in the process picked up close to 50,000 subscribers talking about Bitcoin and altcoins.

Being my first halving cycle, I was in fairness very naive and I personally believed that many altcoins would outperform Bitcoin. While this is true of a handful of projects, it is not something that the majority of crypto influencers have a clue about and I was no exception.

Either you get lucky with a pick or you have a big enough following to push a low cap coin up 400% by talking about it for a few minutes making you look like a crypto investment guru.

The sheer number of crypto videos and crypto tweets I am seeing lately of people attempting this, as well as the rise or even the return of so-called “crypto experts,” is simply staggering.

All this combined with the fact that my email inbox is filled with offers to promote various coins and ICOs again reminds me of the beginning of the 2017 bull market, the bull run that changed the public perception of Bitcoin forever.

Fortunately, I will not be participating in the circus of clowns doing it this time around. However, one has to admit, it does help to get people into the crypto space, and one can argue that it can help fuel the altcoin to Bitcoin super cycle.

Bullish scenario

So with all these signs, what does the week ahead have in store from a bullish perspective?

The first level of resistance will be getting through that $9,450 sell wall. From here, closing above $9,600 (as discussed in a recent analysis here) is needed to invalidate the descending channel, which will put Bitcoin on a path to attack the dreaded $10,500 multi-year resistance level. This is the definitive level that needs to be broken to enter a true bull market.

Bearish scenario

On the flip side, $9,150 is the first level of support, followed by the bottom of the channel around $8,700 as the final level for buyers to step in. Losing $8,700 could put Bitcoin in a massive death spiral, which personally I consider being wishful thinking from bitter bears that didn’t buy the dip at $4,000 in March.

Author: Keith Wareing

Source: Coin Telegraph: Top 5 Signs Bitcoin Is Quietly Entering a New Bull Market Phase

Is Bitcoin allergic to $10,000? Will we see a breakout in 2020 for BTC as this key level keeps being tested each week.

Bitcoin (BTC) price yet again surged past $10K for just a few hours before experiencing a short sharp 10% sell-off last week.

Each time this happens, crypto Twitter brings out the fanfare rejoicing at the fact that we’ve reached this psychological milestone. It’s almost becoming too predictable, and that is exactly why the eventual breakout will catch everyone off guard.

So are there any signals that can help us determine when this might be? Let’s take a look at the charts for the largest cryptocurrency by market capitalization, BTC.

Monthly Fibonacci targets

BTC/USD 1-Month chart. Source: TensorCharts

Starting out on the monthly view, not much has changed since last week. Bitcoin is still hovering around .382 putting the next upside target at the 0.5 Fib of $11,891. Each time Bitcoin surges to the $10K zone, we experience a sell-off around $10,500, which we must first overcome before this can become a reality.

When you look at the historic monthly price action, we can see that last week was the third time that $10,500 was rejected. The question on my mind now is whether this will happen for the fourth time.

The Bitcoin orderbook

BTC/USD Daily. Source: Tensorcharts.com

Taking a look at the orderbook for Binance, we can see large sell orders as denoted by the yellow bars. Previously, these were layered between $9,800 and $10,500. However, there are no meaningful orders at $10,500 anymore.

This could be an early indication that large sellers have a new target in mind, and as far as higher time frames are concerned, $11,800 and $13,900 are the next logical options based on previous monthly resistance and the Fibonacci levels.


Weekly ascending channel

BTC/USD weekly chart Source: TradingView

Moving down to the weekly, and we can see that price is currently trending in an ascending channel, which mirrors the $10,500 monthly resistance as the midpoint of the channel, as well as the 382 Fib as the resistance of the channel.

To the downside, losing $9,000 would open up $7,600 as support based on the 236 Fib drawn on the monthly. To the upside, breaking $11,900 would open up the 618 target at $13,900, which has been a key resistance level on the monthly chart for quite some time.

Bitcoin is yet to trend in the upper half of this relatively new channel though, and with the support being tested last week, one would now want to see the weekly candle close above $10,500 before being particularly bullish.

Until this happens, one needs to remain neutral.

4-hour chart for Bitcoin price

BTC/USD 4H chart. Source: TradingView

Moving down to the 4-hour chart for Bitcoin, I’m looking at the 236 and the 100% Fib retracement for support, which stands at $9,540 and $9,250, respectively.

However, the candles have been printing higher lows and lower highs for the last five days, which generally signals a continuation of a trend, and right now Bitcoin is technically still in an uptrend. But losing the 236, which we have just tested as I’m typing, would change the outlook for the week ahead.

Bullish scenario

BTC/USD Daily chart. Source: TradingView

Lastly, on the hourly chart, we have price trending downwards, with the MACD trending upwards, which signals bullish divergence, meaning a break to the upside is to be expected.

As such the bullish scenario of extending towards the first key resistance of $10,500 looks likely in the short term. Finally breaking out from this level would put $12K firmly within reach before experiencing heavy overhead resistance at $13,900.

Bearish scenario

The first sign of trouble for Bitcoin would be losing $9,250, from here $9,000 would be the last safe level of support before cascading down to sub $8K levels, a scenario which I personally think is unlikely.

Author: Keith Wareing

Source: Coin Telegraph: Forget $10K, Bitcoin $12K Breakout Will Catch Everyone Off Guard

A sideways week for Bitcoin will not come as a surprise but BTC is still poised for a big move soon as it hobbles inside a tightening range.

Last week, Bitcoin (BTC) looked poised for a huge move up to $11,000. Instead, we saw a sidewards week of price action coupled with a small pullback. Has Bitcoin topped out? Is there too much selling pressure around $10K?

Let’s take a look at what’s happening with the largest cryptocurrency by market capitalization, BTC.

More sellers than buyers

BTC/USD 1-hour chart. Source: TensorCharts

Bitcoin currently faces huge resistance between $9,500 and $10,005, according to the Binance order book shown on the Tensor Chart heat map above. At present, these sell walls, the bulk of which is represented by the yellow lines, show a total of 1,737 Bitcoin sells vs. 1,351 buys represented by the darker blue lines.

While this data is only on the Binance BTC/USDT chart, it gives us a good indication that at present there is not enough buying pressure to push BTC/USD above $10K. However it’s important to note that this data changes constantly, and it should only be relied on as long as it’s constantly referenced.

That being said, this does explain why the price of Bitcoin is stuck in a tight range between $9-$10K, and until more buyers step in, it’s obvious that this won’t change.

The weekly view is bright

BTC/USD weekly chart. Source: TradingView

Over on the weekly chart, Bitcoin is currently holding above the previous resistance. However, we are yet to see a full candle body close above this line. At which point, it’ll be a clear signal for the bears to switch bias, and while it currently looks good at the time of writing, if we close below $9,000 today, it’ll be a big setback for Bitcoin in the short term.

All eyes should be on the $9,000 level throughout next week, however, as this is a breakout from a descending channel. Each week, this support level goes down by around $100, so a prolonged failure to significantly break through the sell walls could see Bitcoin’s support slowly fall to $6,400 by the end of the year. That is, of course, until a new path emerges.

Daily MACD continues its bearish divergence

(This Week) BTC/USD daily MACD chart Source: TradingView
(Last Week) BTC/USD daily MACD chart Source: TradingView

The moving average divergence convergence (MACD) indicator is continuing its bearish divergence as it played out exactly as expected from last week’s analysis. The top MACD image is this week, and it’s starting to show signs that it has reached its peak divergence denoted by the blue MACD line beginning to curve in slightly.

The bottom MACD image shows last week’s positioning where it looked prime for the signal line to fall to around 400 and the MACD line to 200. This is exactly where it sits today, and what is needed for a bullish reversal is for both lines to converge around 350.

Should the MACD start to move in this direction then it’s a clear sign for bulls to step in, and I would expect the level of buyers to increase. However, should the MACD and signal lines continue to diverge in this manner then don’t expect fireworks anytime soon.

The upward path

BTC/USD Daily chart. Source: TradingView

Moving down to the daily timeframe, and another path for Bitcoin opens up. At present, we are hovering just above the support of around $9,100, which shows the midpoint resistance of this channel around $10,500 by the middle of next week.

The midpoint level also matches up with a 100% Fibonacci retracement. So should Bitcoin reach this level, it will most likely be met with a lot of selling pressure where a pullback to the support would be expected before seeing any substantial moves.

However, by the end of the week the support of this channel will be around the $10K level, and this — dare I say it — could be the last time you will be able to buy Bitcoin below $10,000 (yes, slap yourself now).

Short-term outlook

BTC/USD Daily chart. Source: TradingView

Finishing up on the hourly chart, and Bitcoin looks primed for a breakout to $9,400. This could close the week in a very bullish fashion. However, as I see it, even breaking down from this point to $9,000 would still leave bulls in control for the time being.

But breaking below $9K at this point would change everything, and as this is Bitcoin, be prepared for both eventualities as anything can, and usually does happen.

Bullish scenario

A close above $9,000 is bullish. From here, I will be looking at first breaking past the sell walls that start at $9,500 to $10,005. Should we get past this, then I expect major resistance at $10,500 before $11K-$12K can even start to be considered as possibilities.

Bearish scenario

Falling below $9,000 opens up the .618 Fib on the daily of $7,890 as a stark reality. This would also completely invalidate both channels I’m looking at this week. From this level it would be time to break out the $6,400 and $4,000 charts again. But with that said, my personal outlook is another sideways week for Bitcoin.

Author: Keith Wareing

Source: Coin Telegraph: Why All Eyes Should Be on the $9,000 Bitcoin Price Level This Week

Bitcoin price experienced a huge 20% surge in value last week, but one indicator suggests BTC could still be in a downtrend.

The price of Bitcoin (BTC), the top-ranked cryptocurrency, currently sits around $9,000, after last week’s impressive 20% rally in a single day. With the halving now less than 2 weeks away, it might seem like a no brainer to go long on Bitcoin to catch the next explosive move.

However, there is one chart view that suggests we may have topped out, and that is what I’ll start with today.

If in doubt, zoom out

BTC USD daily chart. Source: TradingView

In last week’s analysis, I shared two possible ascending channels, one of which was invalidated leaving one in play. This week, I want to look at the possibility that we were not inside either channel and the fact we could still be in a downtrend since the June 2019 pump that almost hit $14,000.

The upper trend line is validated by three touches. However, the lower trendline of this channel puts the immediate downside as low as $3,000 with the moving average around $6,300. These are not numbers that I expect Bitcoin to see again, but it would be foolish to not be prepared for it.

The Fib hints at what a breakout could bring

BTC USD daily chart. Source: TradingView

The Fibonacci retracement levels from the ATH of $20K per Bitcoin are showing us that a breakout today could see us return to much higher levels than previously expected.

$9,550 is the critical level to focus on. It’s both the 0.382 Fib and the top of the channel. Claiming this level could see Bitcoin soar towards the 0.5 Fib of $11,50,0 which then realistically puts the 0.618 Fib of $13,500 on the table.

Now that’s all well and good, but “number go up” doesn’t always happen, and one such indicator that can be relied on to confirm the direction we’re headed based on the current momentum is the monthly Moving Average Convergence Divergence indicator or MACD.

MACD monthly analysis

BTC USD monthly MACD chart Source: TradingView

Last week, I highlighted the significance that the moving average divergence convergence (MACD) Indicator has on the price of Bitcoin when it crosses bullishly on the weekly timeframe.

However, with the bullish monthly candle close comes a new picture for the monthly MACD. Mapped out above is the monthly MACD bullish and bearish crosses with the weekly MACD bullish crosses highlighted with the dotted lines — green for bullish crosses that saw a big run after, and red dotted lines for the false bullish crosses.

The reason for this map is to see if there are patterns that match with the 2017 weekly bullish cross that saw a 2,000% rise. But it’s also useful to see if the higher time frame view is showing us any contradictory momentum that could suggest a dump is due soon.

Moving from the left to the right of the chart, what this shows is that back in March 2017 when the weekly MACD crossed bullish, the monthly MACD was already in a bullish crossover from 2015.

Thus, at the point of the weekly bullish crossover, both the MACD and signal lines were on an upward trajectory. This resulted in a 2,000% increase in price for Bitcoin from the point of the weekly cross.

Later on, the false bullish crossover on the weekly in September 2018 shows us that the monthly MACD and signal line were both in a downward trajectory and that the monthly MACD was already crossing bearishly. Thus, the higher timeframe momentum was signaling that the move from weekly MACD crossover may not be valid.

The February weekly bullish crossover seemingly has exactly the same conditions as the September crossover with one difference. The histogram on the monthly MACD was losing downward momentum as can be seen by the paler pink color compared to the darker pink in the previous crossover. In this case, it resulted in a 400% increase in the price of Bitcoin.

Now looking at the 2020 momentum, we can see that the monthly MACD was chopping and changing direction between December and February, which led to the signal line and MACD having a sidewards trajectory — quite literally a first for Bitcoin.

But if you’ve read this far, and you’re still following where I am going with this, the monthly signal line is on an upward path for the first time since October 2015, back when Bitcoin was just $200 per coin, and if you take this to the $20K all-time high, that’s a monstrous 10,000% or 100x move.

So with this in mind, will the next bullish cross on the monthly MACD happen in June? Are we in store for a 10,000% increase from the current price? Only time will tell.

Bitcoin starting to breakdown

BTC USD 1 hour chart. Source: TradingView

Drilling down to the hourly now, and we can see that Bitcoin was starting to form a pattern of lower highs and higher lows after its big leg up last night.

Typically this signals a potential continuation of the previous trend, and the upside potential is around $9,600. And if we had held this level for a candle close on the daily, then next week would have looked to be incredibly bullish.

As this has just broken down, a pullback to $8,400 throughout the week is to be expected.

Author: Keith Wareing

Source: Coin Telegraph: Bitcoin Hasn’t Done This Since 2015 Before Its 10,000% Bull Run

Bitcoin (BTC) price has gained more than 10% in the last week, giving bulls some hope that the road ahead is a bright one for the leading digital asset.

However, despite an effort to blast through the critical resistance level of $7,200 as mentioned in last week’s analysis, there was a huge rejection bringing home the reality that perhaps it may be a little too soon to be expecting a miraculous bounce back to the $8,000+ levels.

Daily crypto market performance. Source: Coin360.com

$5,500 then moon?

BTC USD daily chart. Source: TradingView

I think it’s safe to assume that Bitcoin has settled back into the descending channel that formed in the second half of 2019. As Bitcoin has now not only bounced off support on the daily, leaving nothing but a wick, but it has now done exactly the same with the resistance.

To me, this validates the channel even more so than before, as the price is currently following a path marked I marked out in yellow, on a video I published to YouTube on March 31. This was one of three scenarios I was waiting on, and the one I felt that was most likely.

As such, since Bitcoin cannot seem to break out above $7,200, it seems probable that bears might be about to regain control ahead of the much-anticipated halving event, and this puts $5,500 as the critical price to hold before cheap corn is back on the menu.

However, many key indicators are contradicting this sentiment.

Is momentum returning?

BTC USD weekly MACD chart Source: TradingView

During sideways market periods, it is easy to get chopped up and spat out when working off lower time frames, and often a glance at a higher time frame can help validate your bias. However, one such indicator that isn’t good for bears right now is the weekly moving average divergence convergence (MACD) indicator, as this is now mooing to the herd.

As can be seen from the chart, the MACD is already starting to pinch towards the signal line. Since we have had a relatively bullish week, we should see this move in even more so when the weekly candle closes, bringing us closer to a bullish cross, which typically results in a sustained uptrend, which almost always lasts over a month if not several.

However, right now, there are bigger things happening in the world that may invalidate this as a possibility, and my concern is that we will begin to see a significant reduction in retail buying power due to the rise in unemployment resulting from the coronavirus lockdowns.

While the worldwide quarantine is in the early stages — with many believing it will only last a couple of weeks — you only need to look at China to see that this will last a lot longer, so who exactly would be buying?

The answer may lie in the Relative Strength Index, which could be enticing smart money into crypto.

RSI hinting at a bounce

BTC USD weekly RSI chart Source: TradingView

The last time Bitcoin approached oversold territory on the weekly, it experienced a 300% price increase within six months as can be seen on the Relative Strength Index (RSI) indicator. This is based on the Dec. 10, 2018, pivot from 29.07 on the RSI scale.

However, Bitcoin had already experienced a bounce on the RSI on March 9, 2020, when it was 33.37 on the RSI scale, and even with the colossal dump on March 12, the RSI is still trending upwards. This brings to light two pertinent questions:

Will Bitcoin see another 300% price rise within a similar timeline after the last oversold pivot?
Was the price purposely pushed down after March 9 to load up on cheap BTC for a high probability of 3x?
But perhaps another clue as to what can be expected from Bitcoin over the coming weeks can be found in the mining difficulty charts?

Mining difficulty drop is slowing

BTC mining difficulty. Source: BTC.com

The Bitcoin mining difficulty dropped by a monstrous -15.95% — the biggest since 2011 — on March 26, an adjustment that helped ease miners’ concerns surrounding profitability. This time last week, it looked as if the mining difficulty would drop by a further -14%.

However, as the week has progressed the adjustment estimate has dropped to just -2.2% and with three days left to go, this could end up closing as a positive adjustment.

You only have to look at the impact the positive adjustments had on the price of Bitcoin this year to see what this could be yet another bullish indicator.

Bullish scenario

All the indicators are bullish, so why does it feel bearish? Right now we are at the top of a valid channel, as such a breakout could well be imminent. For this to happen Bitcoin would need to flip $7K resistance into support and from here $8,200 looks like the next level of resistance we would encounter.

Bearish scenario

The price of Bitcoin has already doubled since its recent bottom, as such a pullback to $5,500 over the next week would be completely reasonable to expect.

If this level fails to hold, then it opens up $3,900 as a possibility. If bulls don’t step in then, I’d be very surprised.

Author: Keith Wareing

Source: Coin Telegraph: Bitcoin Flips Bullish — But Here’s Why BTC Price May Still Hit $3.9K

Bitcoin (BTC) bears are at it again, driving the price down nearly another 10% on March 8 during the weekend when volume is at its thinnest.

So is the pre-halving rally over already? Or is it just about to get started?

Daily crypto market performance. Source: Coin360.com

The 4-hour outlook

BTC USD 4-hour chart. Source: TradingView

Bitcoin broke out of a worrying descending channel on March 5. However in the last hour, after retesting the support line of this channel several times, it has now broken back into it just three days later.

This gives Bitcoin two very real downside targets of $8,100 and $7,500 in the short term. With the upside resistance being first at $8,700 to get out of the channel, and then $10,500 and $11,050, respectively.

However, one has to question the validity of such drastic price action over the weekend, and next week could see a monstrous bullish rise, much akin to the power move we saw from Bitcoin on Oct. 25, 2019, when the price jumped from $7,400 to $10,500.

But what are some of the leading indicators telling us?

Relative Strength Index (RSI) indicator

BTC USD RSI 4-hourly Source: TradingView

The Relative Strength Index (RSI) Indicator on the 4-hour shows that we could have some distance left to fall with a reading of just above 31. This tells us that Bitcoin is approaching heavily oversold on this key timeframe, and historically it must break below 30 before seeing a reversal.

The hourly, however, looks massively oversold, reading at 18.62, which is approaching levels we haven’t seen since Feb. 15.

One would hope to see a reversal at this stage. However, despite the RSI appearing to pivot on this date, the Bitcoin price did not, and continued to fall from $9,700 to $8,400 over a period of two weeks.

But what does the Moving Average Divergence Convergence (MACD) Indicator tell us?

The MACD is looking set to cross bearish on the weekly

BTC USD weekly MACD Source: TradingView

As I have mentioned several times, the weekly MACD is a great indicator when looking to identify bull or bear trends. However, I expressed concerns back in January in my analysis stating that weekly MACD was exhibiting similar signs to that of the false bull phase we saw around August-September 2018.

During this phase, bulls were lured into a false sense of security, which saw Bitcoin fall from $8,000+ to sub $4K in a matter of weeks, and it appears my concern could have been valid.

However, in late 2018 there wasn’t an imminent halving of Bitcoin mining rewards around the corner like there is now. But then again, there also wasn’t a global pandemic either. However I’m yet to see any major correlation between Covid19 and the Bitcoin price as of yet, so I’ll not be going down that road just yet.

The week ahead should give us some answers as we have two historically bullish indicators ahead of us, and should they fail to increase the price of Bitcoin next week, perhaps we need to start looking at the reality of a potential global slowdown having a very negative effect on the price of Bitcoin.

The CME gap

I’ve said it countless times, if you are not trading the CME gaps, “do you even crypto bro?” The CME gaps occur when the Chicago Mercantile Exchange closes for trading on a Friday evening and reopens on a Monday after large weekend moves, which leaves a gap in the charts.

There are many theories as to why gaps fill. One is that orders left on the books from the Friday prior remain unfilled, in this case, sell orders of Bitcoin at $9,165 need to be bought to fill the gap on the charts.

But if the market opens at $8,100, who would buy at a premium of $9,165? Potentially someone who has a long position on margin, that stands to profit from a guaranteed long that’s who. And in such an easy market to move, is it any wonder that historically 90% of CME gaps for Bitcoin get filled?

This isn’t the only bullish indicator though, there is another reliable indicator that has served as a crystal ball this year, and that is the mining difficulty.

Mining difficulty is set to explode next week

By Keith Wareing March 9th, 2020 | Image Source : Coin Telegraph

Next week, the mining difficulty is set to increase by nearly 8% and that’s the most it has increased all year. In fact, it’s the most it has increased in the last 6 months, so this is a very positive sign for Bitcoin.

At the beginning of 2020, the Bitcoin mining difficulty kept increasing every two weeks by anywhere between 4% and 7% and, in turn, the price of Bitcoin followed; and typically this happens on the same day the increase was implemented.

If this follows next week, then Bitcoin could see a tremendous reversal, but only time will tell.

The week ahead for BTC price
The week ahead for Bitcoin is quite important for several reasons. Right now, with the state of the global panic, there is a lot of irrational behavior (for example, how much toilet paper did you buy this week?)

As such technical analysis might be completely useless, and that’s a very real fact that people should consider this forthcoming week. If the CME gap and BTC difficulty increase have no impact, we might see that $4K Bitcoin I spoke about in January after all.

In terms of resistance this week, Bitcoin first needs to reclaim $8,700 and flip this to support again to break out of this bearish channel. After this, I would be looking to $9,200 and then $10,500 as the key levels to break, with the last heavy area of resistance being around $11,050 before we finally go to the moon.

On the downside, $8,100 and $7,500 are the two levels most likely to see support formed, and if $7,500 fails to hold, it opens up $4,000 in 2020 once again as a possible scenario.

Author: Keith Wareing

Source: Coin Telegraph: Bitcoin Slides Another 10% but Don’t Break Out the $4K Charts Just Yet

Bitcoin (BTC) bears took their pound of flesh last Wednesday. However, was this simply a long-overdue correction that was needed for Bitcoin to continue to rally to fresh highs?

Today I’m going to look at the two scenarios that could play out next week.

The bearish scenario for Bitcoin price

It was a devastating blow for bulls last week on Wednesday, Feb. 19, as Bitcoin fell by approximately 10% in a single hourly candle. However as can be seen in the chart above, this channel had already been invalidated two candles prior, and what followed next is what seems to be a blatant display of whale flexing designed to leave both left both longs and shorts completely rekt.

This leaves Bitcoin in the early stages of a descending channel, which could see the leading digital asset retrace to $7,500 over the next 2-3 weeks. So right now, it’s important for Bitcoin to break out of this channel to reclaim a bullish trend.

The resistance here is $9,900 (which is what the price is currently at) and the support is $8,950. However, what if the original ascending channel wasn’t valid?

The bullish scenario for Bitcoin price

The bull in me wants to believe that the low we hit last Wednesday of around $9,250 has opened up the possibility of a slightly wider ascending channel, one that now sees support at $9,500 and resistance at $10,300 and then $11,085.

Annoyingly since the CME closed at $9,740 on Friday, both channels would remain valid in the highly likely event of the gap-filling in the week ahead.

As such, a glance at some key indicators can perhaps give some insight as to what we can expect.

The Relative Strength Index (RSI) indicator is neutral

BTC USD daily hourly

The Relative Strength Index (RSI) Indicator remains remarkably neutral, with a reading of 56.07 on the daily. However, it did show Bitcoin as being massively overbought in the days leading up the selloff.

Bitcoin bounced off 50.16 on Feb. 20 and changed its trajectory from heading to oversold back up towards the overbought range. However, it’s too early to tell, but this could still go either way right now, and the weekly view of the RSI is very much the same.

The MACD is showing early signs of a bullish reversal

BTC USD daily hourly

The Moving Average Divergence Convergence (MACD) is slowly starting to pinch up, this is an early sign that we are going from bearish to bullish. This is further echoed by the pale pink candle on the histogram.

This can also be interpreted as bearish to an extent. However, the weekly MACD is still in full bullish flow, and past performance of Bitcoin when the MACD has crossed bullish on the one-week chart has typically led to several months of price increase, while also keeping in mind that we’re only one month in.

Which leaves one last indicator that seems to have been impacting the price lately.

Mining difficulty in decline

Next week, the mining difficulty is set to be around -1%, the first expected drop this year.

Given that the price has increased around the same time the difficulty has gone up, it would indicate that the week ahead is unlikely to be bullish or bearish, but rather quite a neutral week of sideways action.

Summary

The week ahead for Bitcoin looks to be rather neutral. As a trader, I’m looking for confirmation of the bullish or bearish scenarios laid out in today’s analysis.

Should $9,500 fail to hold as support, then I’ll be looking at the bearish scenario, which shows the next level of support at $8,950.

Should $9,500 serve as support, I’ll be looking for a daily close above $9,900 before assuming the bull trend has resumed. From here I’ll be looking at $10,300 as key resistance, with the breakout resistance being above $11,085.

Author: Keith Wareing

Source: Coin Telegraph: Bitcoin Price Grapples With $10K — 2 Scenarios for the Week Ahead

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