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Three Reasons Why Bitcoin Price Rally Has Stalled

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  • Extremely overbought conditions and other factors seem to have stalled bitcoin’s promising price rally.
  • Acceptance below $4,912 would validate signs of indecision on the weekly chart (doji candle) and open the doors for a deeper drop to $4,527 (200-day moving average).
  • A break above last week’s high of $5,347 would invalidate the weekly chart doji candle, although an immediate rally to $6,000 looks unlikely with the daily RSI still flashing overbought conditions.

Bitcoin’s recent price rally has stalled and signs of indecision are evident in the market just a week after a big bullish breakout.

The leading cryptocurrency closed at $5,190 on April 7, confirming an upside break of a bearish channel – the same pattern that paved the way for a bull market in 2015.

So far, however, the follow through to that bearish-to-bullish trend change has been anything but bullish.

The cryptocurrency witnessed two-way business last week, clocking a high and low of $5,347 and $4,912 before closing almost flat at $5,162.

So, the rally looks to have stalled due to the following three factors:

Overbought conditions

Bitcoin’s 14-day relative strength index (RSI), a widely followed technical indicator, jumped above 70.00 on April 2, signaling overbought conditions as the price jumped over 18 percent to highs above $5,000.

With the price climbing further to a 4.5-month high of $5,345, the RSI rose to near 90 levels, the highest since December 2017.

An extreme overbought reading is considered a sign the rally is overdone and is usually followed by a reaction – a price pullback or a consolidation, as is the case currently with bitcoin.

Prices then made numerous failed attempts to convincingly scale $5,300 in the eight days before a drop to $4,912 on April 12.

Bearish volume divergence

Bitcoin’s 24-hour trading volume across all cryptocurrency exchanges, as calculated by CoinMarketCap, doubled to $21 billion on April 2, validating the bearish-to-bullish trend change signaled by the break above the key resistance of $4,236 and the rally to $5,000.

As the cryptocurrency extended gains further to a fresh 4.5-month high of $5,347 on April 8, though, trading volumes tapered off to $17 billion, reinforcing the overstretched conditions reported by the 14-day RSI.

Hence, the pullback to $4,912 (Friday’s low) was not surprising. Prices have recovered by more than $200 over the weekend, but volumes are down further, to $10 billion. So, the recovery could be short-lived.

Forcing out weak hands before building breakout

The financial markets often test buyers’ resolve by revisiting former resistance-turned-support before building on a major bullish breakout. And that seems to be the case here.

For instance, BTC cleared the 100-day moving average (MA) hurdle on Feb. 19. The newfound support, however, was put to test multiple times in the 10 days to March 4 before a sustained move higher.

On similar lines, prices fell back below the psychological support of $5,000 last Friday and may drop even further to the 200-day MA, currently at $4,527, as the average is widely considered a barometer of a bullish/bearish trend.

The case for BTC shaking out weak holders with a drop to the 200-day MA looks stronger if support a $4,912 is breached.

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Weekly chart

On the weekly chart, BTC created a doji candle on Sunday, which is widely considered a sign of indecisive market.  Interestingly, the doji appeared following a high-volume falling channel breakout. So, it could be considered a sign of bullish exhaustion.

Acceptance below $4,912 – the low of the doji – would confirm buyer exhaustion, opening the doors for a deeper pullback to $4,527 (200-day MA).

4-hour chart

On the 4-hour chart, BTC could be creating the right shoulder of a head-and-shoulders bearish reversal pattern.

A break below the neckline support at $4,988 would create room for a drop to $4,629 (target as per the measured move method).

As of writing, BTC is changing hands at $5,142 on Bitstamp, representing a 2 percent gain on a 24-hour basis.

Disclosure: The author holds no cryptocurrency assets at the time  writing.

 

source.nulltx.

Bitcoin

More Bitcoin ATMs are being introduced by LibertyX as interest grows

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  • The company behind first launching Bitcoin ATMs in the United States, LibertyX to introduce more.
  • LibertyX have announced they will add another 90 ATMs to its network. 

LibertyX, the firm that launched the first Bitcoin (BTC) automated teller machine (ATM), in the United States, will be adding 90 new machines to its network.

The Boston-based firm will be partnering with independent ATM operator DesertATM, as part of the network expansion, as detailed within a report by global ATM market publication ATMmarketplace on July 18.

DesertATM will be uploading LibertyX on 90 of its Genmega ATMs to facilitate Bitcoin operations. In terms of the new Bitcoin ATM locations, these will be placed at; gas stations such as AMPM, ARCO & Chevron, as well as Family Dollar retail stores, as per the press release notes.

source:.fxstreet

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Bitcoin

Bitcoin not yet banned in India, regulations around the corner

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  • The Minister of State to the Ministry of Finance told the upper house of the Indian Parliament, cryptos are not banned yet.
  • The Minister, Anurag Singh Thakur, also stressed the need of creating a solution that caters to global regulators.

As per Anurag Singh Thakur, the Minister of State to the Ministry of Finance, holding or trading cryptocurrencies is not banned in India. During an address to the upper house of the Indian Parliament, Thakur stated that the Reserve Bank of India and the Ministry of Finance have issued notices regarding the use of Bitcoin and other similar coins:

“Presently, there is no separate law for dealing with issues relating to cryptocurrencies. Hence, all concerned Departments and law enforcement agencies, such as RBI, Enforcement Directorate and Income Tax authorities, etc. take action as per the relevant existing laws.”

The Minister’s response followed a recent report regarding an alleged crypto blanket ban draft which stated that the government would sentence crypto traders with a ten-year imprisonment.

In a separate letter addressed to the Ministry of Corporate Affairs, Thakur stated that an interministerial committee needs to create a solution that caters to global regulators:

“It is difficult to state a specific timeline to come up with clear recommendations. The Inter-Ministerial Committee (IMC) under the Chairmanship of Secretary, Department of Economic Affairs is examining all issues, including the pros and cons of the introduction of an official digital currency in India. No decision on licensing and authorizing any entity or company to operate such schemes or deal with Bitcoins or any virtual currency has been made as yet.”

source:.fxstreet

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Bitcoin price prediction: BTC/USD faces two healthy resistance levels on path back to $11,000

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  • BTC/USD is currently trading around $10,545.
  • The two resistance levels are at $10,575 and $10,700.

BTC/USD had a bearish Friday where the price fell from $10,660 to $10,540. Bitcoin managed to have a bullish start to this Saturday and is currently trading for $10,545. The daily confluence detector shows two moderate-strong resistance levels at $10,575 and $10,700. On the downside, there are two support levels of note at $10,500 and $10,375.

BTC/USD daily confluence detector

fxsoriginal

The $10,575 resistance level has the 1-week Fibonacci 61.8% retracement level, while the $10,700 has the most substantial resistance level but no confluences has been detected. On the downside, the $10,500 support level has the 100-day simple moving average (SMA 100) and the 1-hour previous low. The $10,375 level possesses the 1-day Fibonacci 38.2% retracement level.

source:.fxstreet

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