Bitcoin
Bitcoin Market Technical Analysis: November 16, 2017
The recent price drop by bitcoin from its all-time high of $7896.04 on November 8, 2017 to $5460.62 on November 12th caused a major “shakeout.” Traders either elected to take profits, had their trailing stops activated, or, for those unfortunate traders that were holding out-of-the-money positions and could no longer bear any further draw-down, took their losses.
Many cryptocurrency media pundits characterized Bitcoin as unstable with violent price swings. Some even announced the “bursting of the bubble.”
Despite what the pundits say, Bitcoin continues to prove its resilience.
Chart #1 below shows that it has almost made a complete recovery after hitting the low of the “violent” price swing only five days ago.
For those pundits that that haven’t bothered to look at a price chart, it can clearly be seen on chart #1 that a similar price drop took place on September 2, 2017 from a high of $5098, to a low of $3250 on September 15th(shown in the blue shaded area). This price drop accounted for $1848, or 36%. The recent price drop that Bitcoin is recovering from now measured $2436, or 30%.
And yet here Bitcoin is, not far from making new all-time highs again.
Chart #1: Bitcoin Daily
From a technical analysis perspective there are a few observations that are worth noting.
First, in our last analysis of Bitcoin dated November 13th, we noted a pattern of two consecutive upbars on a daily chart that consistently signals an upcoming upward price movement. The pointer on Chart #1 shows the pattern emerging immediately following Bitcoins price drop. The close of the second upbar was the ideal place to enter long. So far, the pattern has held.
A second observation is that the price action is right back on the uptrend that it was on prior to the price drop (shown by the purple trend line).
A third observation is that price has reached a resistance level (shown by the blue horizontal line).
Chart #2 below shows the resistance points going back to November 7th.
Chart #2: 5-Minute Bitcoin
On the 5-minute chart it can be clearly seen that a breakout is in progress. If price makes a new high, for those traders that are not already holding long positions, the next price dip would be ideal to enter long.
The last observation is one of caution. The one thing that this setup is missing is volume.
The 5-minute chart shows volume diminishing as price increases. Keep a close eye on volume. If Bitcoin makes a new all-time high without seeing a spike in volume, this may be indicative of lack of interest by traders/investors.
This may cause the price recovery to fizzle out.
A protective stop-loss should be place no lower than the lowest daily close of the price drop (as shown by the red horizontal line on chart #1), and adjusted to follow as price increases.
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Bitcoin price dumped hard on Monday, briefly slipping below $41,000, erasing gains recorded in the previous week. The premier cryptocurrency seems to have exhausted its recent rally propelled by industry vulnerabilities. At the time of writing, the world’s largest cryptocurrency was trading slightly lower at $41,385. Bitcoin’s total market cap has dipped by 2% over the past day, while the total volume of BTC tokens traded over the same period climbed by 58%.
Fundamentals
Bitcoin price has been facing retracements and a rollercoaster over the past few days after recently rocketing to a 20-month peak. On-chain data has suggested that many investors used the opportunity to take some profits, leading to a decline in the asset’s price.
Bitcoin’s price slump is mirrored in the wider crypto market, with the global crypto market cap decreasing by 1.85% over the past 24 hours to $1.55 trillion. The total crypto market volume has increased by 32% over the same period. The Crypto Fear and Greed Index has plunged from a level of extreme greed to a greed level of 70, suggesting a decline in risk appetite.
Ethereum, the largest altcoin by market capitalization, is currently trading at $2,167, down almost 3% for the day. Meme coins have been hit hard by the market slump, with Dogecoin and Shiba Inu down by more than 4% over the last day.
Last week on Thursday, cryptocurrency experts took notice of…
Bitcoin price edged lower on Thursday despite optimism in wider markets on the back of the Fed’s interest rate decision. The flagship cryptocurrency has been consolidating above the critical level of $42,000 after briefly topping $44,000, its highest level in 20 months. Bitcoin was trading 0.71% lower at $42,569 at press time. BTC’s total market cap has increased by more than 3% over the last day to $832 billion, while the total volume of the asset traded over the same period jumped by 22%.
Economic Outlook
Bitcoin price has been trading sideways over the past few days, suggesting a pause in its recent rally towards $45,000. The premier cryptocurrency has decreased by 4% in the past week but remains 15.22% higher in the month to date. The digital asset has staged a significant recovery this year after a torrid 2022 in which a string of scandals, including the collapse of FTX, led to a market meltdown, undermining the credibility of the sector.
The crypto market has been buoyed by the Fed’s latest interest rate decision. The US Federal Reserve on Wednesday held its key interest rate unchanged for the third consecutive time, in line with market expectations. With the easing of the inflation rate, members of the Federal Open Market Committee (FOMC) voted to keep the benchmark overnight borrowing rate in a targeted range between 5.25%-5.5%.
Additionally, the central bank indicated that three rate…
Bitcoin price has been hovering above the $43,000 psychological level over the past two days amid anticipation about the potential approval of a spot bitcoin ETF. The flagship cryptocurrency has climbed more than 16% in the past week and nearly 170% in the year to date. Bitcoin’s total market cap has increased by nearly 5% over the past 24 hours to $858.9 billion, while the total volume of the token traded rose by 43%. The Bitcoin price was trading at $43,914 at press time.
Fundamentals
Bitcoin price has posted significant gains over the past few days, climbing to its highest level since April 2022, before the crash of a stablecoin that started a litany of company failures, pummeling crypto prices. The world’s largest cryptocurrency briefly topped the crucial level of $44,000 on Wednesday amid rising momentum despite being massively overbought.
According to analysts, with no spot bitcoin ETF approvals yet and the halving event five to six months away, the market is riding on FOMO. Capital has been flowing in the Bitcoin market amid enthusiasm that the launches of spot ETF will bring in billions of dollars of new investment into the crypto sector.
Investors have already started providing capital as seed money for ETF products. Notably, a recent report by CoinDesk showed that the world’s largest fund manager, BlackRock, received $100,000 in capital from a seed investor for its spot bitcoin exchange-traded fund…
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