Bitcoin (BTC) passed above the $11,000 mark this morning, but is having a tough time holding on to the gains amid low trading volumes.
As of writing, CoinDesk's Bitcoin Price Index (BPI) had dropped slightly to $10,890 - up around 19 percent from the weekly low of $9,304.68, and 5 percent over the last 24 hours.
A look the individual markets on data site CoinMarketCap shows trading volume is highest in BTC/USDT (bitcoin-tether) pair listed on the cryptocurrency exchange OKEx. Further, three out of the top 10 exchanges by volume offer BTC/USDT. So, it appears investors are using tethers to trade bitcoin - perhaps due to the USD-pegged token's low volatility.
Meanwhile, 24-hour trading volume stands at $8.4 billion - the highest since Feb. 21. However, that number doesn't look particularly impressive when compared to the average daily trading volume of $13.4 billion seen in January and $13.2 billion seen around the price peak in December. Further, the 24-hour volume is largely unchanged from the February average daily volume of $8.25 billion.
While stagnant volumes are a cause for concern, the odds of a bullish inverse head-and-shoulders breakout have improved, price chart analysis indicates.
Daily chart (linear scale): Descending trendline breached
The descending trendline (drawn from the Dec. 17 high and Jan. 6 high) resistance has been breached, using the linear price scale (also known as arithmetic scale), signaling a bullish break.
Daily chart (log scale): Trendline resistance intact, BTC falls back below $11,000
On the above chart (prices as per Bitfinex), the descending trendline resistance shifts higher to around $11,600 due to the log price scale.
Since BTC has moved by a large percentage over the last year, log price scale is preferable as it plots two equal percent changes as the same vertical distance. So, regardless of where we are on the graph (at $2,000 or $20,000), a significant percentage move will always correspond to a significant visual change.
That said, a significant majority of investors use the linear scale and hence, it could be said that an upside break of the descending trendline occurred earlier this week.
Further, the bullish 5-day MA (moving average) and 10-day MA cross on this chart also favor the bulls, as does yesterday's close (as per UTC) above the 50-day moving average (MA). And, last but not least, the relative strength index (RSI) has moved higher, indicating scope for an upside move in BTC prices.
However, yesterday's price gains were not backed by strong volumes and the retreat from the intraday high of $11,189 to $10,900 seen today has neutralized the immediate bullish outlook.
View
A high volume break above $11,610 (inverse head-and-shoulders breakout) would open the doors for a rally to $17,000-$17,400.
Meanwhile, a drop below the descending trendline support of $10,000 (on the linear chart) would signal bullish invalidation.
Bearish scenario: As discussed yesterday, a daily close below $9,280.4 (Feb. 25 low) could yield a sell-off to $6,500-$6,000.
Chart image via Shutterstock
https://www.coindesk.com/bitcoin-struggles-to-stay-above-11000-amid-low-volumes/
Analysis of BTC dated 1/3/2018.As of writing, CoinDesk's Bitcoin Price Index (BPI) had dropped slightly to $10,890 - up around 19 percent from the weekly low of $9,304.68, and 5 percent over the last 24 hours.
A look the individual markets on data site CoinMarketCap shows trading volume is highest in BTC/USDT (bitcoin-tether) pair listed on the cryptocurrency exchange OKEx. Further, three out of the top 10 exchanges by volume offer BTC/USDT. So, it appears investors are using tethers to trade bitcoin - perhaps due to the USD-pegged token's low volatility.
Meanwhile, 24-hour trading volume stands at $8.4 billion - the highest since Feb. 21. However, that number doesn't look particularly impressive when compared to the average daily trading volume of $13.4 billion seen in January and $13.2 billion seen around the price peak in December. Further, the 24-hour volume is largely unchanged from the February average daily volume of $8.25 billion.
While stagnant volumes are a cause for concern, the odds of a bullish inverse head-and-shoulders breakout have improved, price chart analysis indicates.
Daily chart (linear scale): Descending trendline breached
The descending trendline (drawn from the Dec. 17 high and Jan. 6 high) resistance has been breached, using the linear price scale (also known as arithmetic scale), signaling a bullish break.
Daily chart (log scale): Trendline resistance intact, BTC falls back below $11,000
On the above chart (prices as per Bitfinex), the descending trendline resistance shifts higher to around $11,600 due to the log price scale.
Since BTC has moved by a large percentage over the last year, log price scale is preferable as it plots two equal percent changes as the same vertical distance. So, regardless of where we are on the graph (at $2,000 or $20,000), a significant percentage move will always correspond to a significant visual change.
That said, a significant majority of investors use the linear scale and hence, it could be said that an upside break of the descending trendline occurred earlier this week.
Further, the bullish 5-day MA (moving average) and 10-day MA cross on this chart also favor the bulls, as does yesterday's close (as per UTC) above the 50-day moving average (MA). And, last but not least, the relative strength index (RSI) has moved higher, indicating scope for an upside move in BTC prices.
However, yesterday's price gains were not backed by strong volumes and the retreat from the intraday high of $11,189 to $10,900 seen today has neutralized the immediate bullish outlook.
View
A high volume break above $11,610 (inverse head-and-shoulders breakout) would open the doors for a rally to $17,000-$17,400.
Meanwhile, a drop below the descending trendline support of $10,000 (on the linear chart) would signal bullish invalidation.
Bearish scenario: As discussed yesterday, a daily close below $9,280.4 (Feb. 25 low) could yield a sell-off to $6,500-$6,000.
Chart image via Shutterstock
https://www.coindesk.com/bitcoin-struggles-to-stay-above-11000-amid-low-volumes/
Yesterday morning, after forming the interlocking model, the price had a strong rebound from 10563 to 11071 and then back and sideways around 103xx.
Price is in the strong resistance (10109-10439) and is trying to get out of this area to create a new mutation.
+ On frame H4:
- A new barrier has been formed, but the slope is quite large so it can be broken at any time.
- Looking at the RSI a little after the crash over 11k yesterday was going down nice and sideways at the big resistance. The RSI sideways and the price is in a big barrier is implicitly recommend them. I have a wise expectation when nothing is certain and clear at this time.
- MACD is shifting down while making the first tones for the new period and not having any divergences happening at this time frame.
- William% R, after hitting level 75, has shown signs of rebounding, signaling that the inertia of the price is starting to weaken for both yesterday's price declines.
- Understanding the change of BB, after a series of time prices touching the band, go down and are reluctant at the 20 EMA do not know if it is strong enough to continue breaking or not when the relationship based on W% R did not is strong.
- The head and shoulders pattern remains the same, yet the other side is not complete because the price has not touched the neckline yet.
- The counting of waves during this time is too difficult because there are no rules have been violated. But if some of the winter solstices are still rigidly squeezing it into their "me", then maybe the price is entering the 3 corrective waves down to ABC in pretty state.
On the other hand, the price is running in the cloud to make it sideways and it is a bit of fun that the cloud is not so thick and can break down at any time. Break Kumo's strategy can be applied as Chikou Span is also easily accessible through the clouds. Ironically, because the price is between Tenkan and ijun, it is more difficult to determine the direction later.
+ Frame H1:
- There is nothing better when the price is also in the Kumo not to go out. Tenkan is sticking to the price, lying under Kijun and both lines are on the shelf. If Chikou break the price in the downward direction and at the same price break kumo down then the price is always ae.-
- Both the support lines against the current price are crossing at Kumo so the price up during this time is quite difficult, unless there is a big change like Rover getting married for example: 3
- RSI or Stoch signal is still not worth anything. There are always red lines that are as colorful as red.
SUMMARY: ONE-TIME TO APPLY, PLEASE READ OUT OF YOUR PERSONAL INITIATIVE.
