Tight Range And Low Volume [Bitcoin Update 02.04.2018]
Since we broke the 7000$ barrier Bitcoin is in a pretty tight range, althought it had some wild price action around 6450$ and 7250$. Overall it is in the 6800 - 7100$ range and this consolidation was expected. We are way below the moving averages, especially the long-term ones. After the death cross oficially happened (The 50-day MA crossing the 200-MA) we are kind of in the waiting game.
As you can see from the chart above the 6800$ support is holding pretty well for now. Also a catch-up game to the moving averages can be expected as BTC is way below all of them. Usually when something is very extended from the MA's it tends to catch up with them sooner or later. For example the 200 SMA is at 9393 and the 21-day EMA is 8042$ which is over 1000$ above. We are in the middle of chart and a possible scenario is a short-term rally and then they might hammer it again.
It is important to note that the global markets have sold off very sharply once again today and the Dow Jones broke the 200-day and closed below it. I don't know if this will affect the crypto market, but in general high-risk assets get punished when there is fear. At the moment I think there certainly is fear in the markets with the trade war and all the tariffs.
What's Next
- If we close below 6800$, we might test the previous low at 6000$
- If we break above 7250$ and hold, we might test the 8-day EMA at 7305$
What are your thoughts for the general market ? Let us know in the comments :)
I think TA is telling much more than the fundamentalists sometimes claim. Chart patterns are just representations of market participants emotions and if some very reliable pattern points to something, we should consider this something even all fundamentals are against it.
Short term I speculate on rally to $10k but overall situation is that Bitcoin had found general consensus about lower price bound, which is $5k to $6k. We have similar situation in 2015 ($200 to $300). This is a significant improvement in value.
For me this is two most important fundamentals and I give a shit to this news based fundamental stuff. News and use of statistics mainly are used for public opinion manipulations conducted by big market players who have influence on media. They use this influence for seeding fear, concerns and all kind of FUD among more emotional sensible traders to empty their pockets in the process.
Well, people who actively trade BTC and crypto-related markets should know that this is an extremely news sensitive news.
I personally don't think that if we go down we will rally that much. I kinda see us go up to 8k and then revisit the 5-6k range. Very interesting to se ehwat will happen :P Thanks for commenting.
Totally agree with you, fear is reigning, in general. I am not that much into "technical analyses", as they usually reduce the very complex story of personal investments - with all the hopes, fears, and decisions due to misinformations - into a small story. Nevertheless, I think there is some truth in it, so thanks a lot for this post!
Thank you. I usually use Technical Analysis for entry points and it also gives you a lot of info when to stay out of the way. this is pretty useful if you trade on a regular basis. Overall fundamentals are the key but most of the time markets are irrational so... what to do.
Thanks for your comment :)
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