Ahoy and merry Christmas in advance to everyone. As to be expected, here are some of stories you will read in the latest Blockchainology Flipboard magazine update:
A more enjoyable option would be for you to read the magazine on your iPad using the Flipboard app. If you do not have the Flipboard app, download in the app store, install, and enter the "Blockchainology". This magazine is curated by Olusegun Oyekanmi
I must admit that I should have written this piece over a week ago but didn’t. Bitcoin has once again stunned many people with its surprise move a little while ago. I began to wonder if the price had bottomed out. This could only mean one thing, a look at the charts. Many of you may recall that I have mentioned looking at the higher timeframe charts, in this case, the weekly charts with the assistance of some moving averages.
A look at the BTC: USD weekly chart from Bitfinex indicates that there is a high probability that Bitcoin has bottomed. The reason for this is that Bitcoin’s last two weekly prices ranges closed above the 21-weekly EMA (Exponential Moving Average). So far this week has closed above the 21-weekly EMA. As I have said in the past once price closes above the 21-weekly average on two consecutive occasions, then it is most likely that the price will rise. The second condition is for price to stay above the prior low which was $7333.40. If these two conditions are maintained then this means that the buyers and bulls are in control.
We must not fail to mention that the price is also above the 55-weekly moving average. Falling below this average means falling below the previous low. If this happens, then the bears and sellers are in control, which could mean a price fall. Bitcoin volatility comes as no surprise hence, massive price rises and falls. No one can say when and how this will happen but then your guess is as good as mine.
The price of BTC has confused a lot of people and the noise put out there called commentary or should we say analysis is no clearer as to the direction it might take. Even though I could write more regularly in this regard, I tend to watch the price activity for a little while before saying anything. Rather than complicating matters, I decided simpler metrics should come into play.
BTC Price & the 21-weekly Exponential Moving Average Courtesy Tradingview.com
Looking at the BTC weekly chart you will see that price is still above the 21-weekly exponential moving average. On the week starting 14 July, the price of Bitcoin fell to $9090.4 just over $1000 off the 21-weekly EMA. The current price is now at $10376.2 (at the time of writing). As long the BTC price does not break support at the 21-weekly EMA then we are not in a bearish market. Should it do so, then we are heading into a bearish market with a potential drop to between $6000 - $7000. A drop to this level means breaking support at $6747 – 55-weekly EMA – and potentially a fall to $5000.
Could this possibly happen? Maybe, but as none of us really know what exactly, your guess is as good as mine.
In my previous blog piece – Momentum or Serious Retracement -, I stated that if Bitcoin were to break the $8300 resistance (at that time), it would hit $9000. It did even if for a short time. The Bitcoin rally over the last few weeks has been to an extent FOMO (Fear of Missing Out) based. I am sure there are other factors involved, but let’s put them aside. Thus, what is maximum FOMO? This is only when the marketplace comes to a stage where we will experience a major retracement in the price of Bitcoin. In my lowly view, I don’t believe we are at maximum FOMO. Here are some of my reasons why:
Firstly, I believe there are people still interested in investing in the Bitcoin market. I think that when we see prices return to $9000 levels, then we will see a rush into the market. Maximum FOMO may then be hit at the $9500 - $10000 levels. I back this up by looking at the BTC price levels on the higher timeframes. The BTC weekly chart shows the overbought levels in the RSI (Relative Strength Index) indicator. The monthly timeframe has also shown overbought levels.
Secondly, I mentioned the $9500 levels because the Fibonacci retracement level of 61.8% shows resistance. We can also see that there has been a significant overbought activity for the month of May.
Thirdly, Bitcoin has been on a bullish-run with almost no retracement whatsoever. Many are wondering when this will occur. There is some sentiment that this could happen any time soon. We know that BTC has a history of bullish-runs in the past and this is no exception. However, what occurred on Thursday did shake a few up. I believe should the Bitcoin price fall below $8000 then a major retracement is on. Bitcoin price action, on the other hand, may say otherwise.
As we all know, the market will do what it wants regardless of how we feel. All we can do is be vigilant for what may occur. And as to when exactly maximum FOMO might happen, your guess is as good as mine.
You would have to be deaf, and blind not to notice the commentary on Bitcoin at the minute. With the parabolic rise of this cryptocurrency come a plethora of thoughts. Some believe BTC $50 - $100k next while others submit it may fall to $3k. As many a trader will tell you, always look to the higher timeframe to deliver an indication as to what the price of a cryptocurrency, stock, or instrument might be. I studied recent Bitcoin charts this way, and here is what I discovered. I trade BTC on daily charts and not hourly. Because of this, I look at the weekly charts for guidance. Sometimes I look to the monthly charts for more guidance.
The weekly charts show you that there may be some momentum left in Bitcoin. Appearing at the chart below, you will understand that the momentum indicator has proven strength in the trend for the last eight weeks. The indicator shows no sign of momentum dropping any time shortly. In other words, the momentum is very bullish. This (momentum) may dissipate in about three weeks, and bring about a retracement. You may have also noted that there is some resistance at the $8300 mark. I think that if Bitcoin breaks this resistance, $9000 is certainly on the cards before any future drop in price. Like so many of you, I would love owning a crystal ball telling me the future price of Bitcoin, unfortunately, this is not the case. And since it is not the case, your guess is as good as mine.
BTC Weekly Charts with Momentum and CCI Indicators Courtesy Investing.com
I am a regular competitor on the Cindicator platform. One of the questions asked was what we thought the maximum and minimum Bitcoin prices might be by the end of the day. This type of question was asked fairly regularly so I made my predictions. Bitcoin it turns out made such a price jump that I ended up losing a large number of points for getting it wrong. Many pundits/analysts got it wrong. They like many did not see the coming parabolic move.
Next, there was the talk of Bitcoin going as high as $25k. Some even posited $250k! Between 26 April and 15 May, we saw the massive price rise driven by FOMO (fear of missing out). BTC price went as high as $8323. The enthusiasts among us must have thought prices were headed back to $20k! Alas, this doesn’t seem to be the case. As I write there has been a retracement to 61.8%.
Volatility and uncertainty are characteristics associated with Bitcoin. They are not going anywhere. It looks like Bitcoin’s price is going to infinity but not beyond. Who knows what’s next, but then again, your guess is as good as mine.
Recent reports indicate that something fishy may be going on in the cryptocurrency markets. The point in case is Bitfinex. It is believed that Bitfinex is skewing the price of Bitcoin. This has concerned the likes of CoinMarketCap to the point that it has stopped listing Bitfinex prices. I had initially thought this impossible, but on investigation, it turned out to be so. Taking a quick glance at the Bitcoin price, you will immediately see the disparity. What this means is that the Bitcoin price on Coinbase, Bitstamp. Bittrex, Gemini, and OKCoin are pretty similar. For those who love arbitrage, there are no opportunities to take advantage of. The weighted average price is $5821.43 (at the time of writing) while the price on Bitfinex is $6121.6. This is a difference of $300.17! Such a difference should be cause for concern.
New York State Attorney has also announced an investigation into the conduct of Bitfinex, Tether, and iFinex for what appears to be a series of bank transfer cover up of losses totaling $850 million. Many an analyst believes that this might bring on a new bearish sentiment in the market. That concern seems to have dissipated considering the current bullish sentiment in the price of Bitcoin.
While the disparity of Bitfinex to other exchanges has brought on some concern, a counter argument could be brought forward concerning the exchanges Coinfloor and itBit. Their Bitcoin prices are $4376, and $3547.7 as at the time of writing. This is a difference of $1445.43, and $2273.73 respectively, when deducted from the weighted average. So, what is the real price of Bitcoin? Do we really know? I suppose not, but as I have always said, your guess is as good as mine.
It has been a while I have said anything about Bitcoin. I am sure some of you now know that Bitcoin on Bitfinex has gone over the $6000 mark! As you can see from the chart, the upward trend looks very strong. This trend is also backed up by volume. The Vortex Indicator also shows sign of increased strength to the upside for Bitcoin. I suppose we all knew that Bitcoin would hit the $6k someday or the other, which should come as no surprise. Surprisingly as I write, Bitcoin on Coinbase, Bitstamp, Bittrex, and Gemini have all fallen below the $5700 mark. Perhaps one should not be surprised considering that Bitcoin has had 30-day volatility of 18%.
Next price target for Bitcoin $6608. We only consider this price based on the increased strength of the uptrend. We must remember it took Bitcoin quite a while to break the $5700 - $5735 price mark. We are most likely to see something similar before its price rise to $6608. When considering the FOMO (Fear of Missing Out), greed, and of course the volatility, one can never be sure as to what is going to happen next. But then again, your guess is as good as mine.
Do you think Bitcoin will rise to $6608 next? What do you think? Let us know in the comments section.
As you can expect, here is just a small sample of the stories you may have missed:
Crypto-Specialist Economist Reveals Trick for Governments to ‘Kill Bitcoin’
Bitcoin ‘anonymization’ is up 300% this year
Kraken delists Bitcoin SV
Samsung and IBM going all-in to Ethereum and Stellar?
Tether “fraud” is just the tip of the iceberg, says crypto intelligence firm CipherTrace
Institutional Love For Crypto Confirms Bitcoin Isn’t a Bubble
Secrets Inside Crypto ETPs and ETFs - What's Hiding Behind The Risk
Crypto world keeps faith in Tether, even with news of fraud investigation
Here's What The Bitcoin Community Should Do About The Fake Satoshi Nakamoto
A more enjoyable option would be for you to read the magazine on your iPad using the Flipboard app. If you do not have the Flipboard app, download in the app store, install, and enter the "Blockchainology". This magazine is curated by Olusegun Oyekanmi.
The following blog piece is not financial advice nor is it encouragement to buy crypto assets of any kind. This is strictly for educational purposes. You have to be careful with your hard-earned money, in other words, do your due diligence before making any investment at all.
Those who have read my earlier blog pieces will remember that I have mentioned the 200-weekly moving average (200-wma). You may have noticed that I have not done one of these blogs in a while. The main reason was Bitcoin’s sideways price movement. A close watch was required, especially for breakouts to a bullish pattern.
Bitcoin Price with 200-Weekly Moving Average
One of the ways to keep a more critical eye on the price movement is via the 200-wma. Historically and statistically, markets have been known to bottom at the 200-wma. It is the same for crypto markets. Bitcoin’s previous low of $3238 – on the Bitfinex chart – may be tested once more. If that happens and $3238 becomes the support level, then the downward price pattern may come to an end. If this is the case, a bullish pattern may then follow. Having said that, the 200-wma is one of the easiest and quickest ways to keep an eye on the future price movement of Bitcoin. As is always the case, we can never tell what might actually happen, but then again, your guess is as good as mine.
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