bitcoin May Soon Reverse
For some reason or another, analysts have begun to believe that () may be . In a Magic Poop Cannon postulated that is currently expressing a number of bearish signals. Firstly, failed to hold above its uptrend channel, all while failing to surmount a “major overhead resistance zone” that begins at $5,777 and ends at $6,200.
What’s more, there are an array of bearish divergences seen in the Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), and the Stochastic RSI, leading Magic to the conclusion that is “wounded” and not prepared to enter a bull run just yet. He adds that the Network Value to Transactions ratio (NVT) is currently flashing a sell.
Aside from technicals, some evidence is mounting that in the short run, ’s price action is tied to traditional assets, namely stocks, which is a bad sign.
On Sunday, Donald revealed that he intends to increase tariffs on Chinese-made goods from 10% to 25% by Friday. Global assets, like stocks and even , flashed red minutes later. As crypto trader “Light” points out, when Asian markets opened on Monday, fell right in lockstep, reacting to the tariff salvo negatively. There is a fleeting chance this is pure coincidence, but lost a very similar percentage to the Hang Sang in the same time frame, implying that remains a “risk-on” asset, as Light explains.
With unlikely to budge, the U.S. stock market and other global indices may continue lower, potentially unwinding Q1’s monumental rally, thus being a short-term detriment to and other .
In a related string of potentially negative fundamental factors, Tom Lee, Fundstrat’s head of research, has postulated that the could actually be a negative price action catalyst for . The prominent commentator explains that $1 billion worth of new Bitfinex will have a negative impact on and other digital assets, as the market needs to “absorb” an influx of the so-called “LEO” . As Lee notes, “ miners sell $7mm per day, so a $1 billion IEO is essentially 142 days worth of miner selling taking place in one day.”
The Bull Case
Sure, Magic does note that there are clear reasons to be at least short-term bullish on . But some are sure that the charts are leaning bullish.
According to David Puell, the head of research at Adaptive Capital, ’s chart is currently showing an array of bullish signals, both in terms of technical indicators and pure price action.
In a t, the investor remarked that is currently in a broadening ascending wedge, a pattern defined by legendary chartist Bulkowski as a catalyst for bullish continuation. Bravado’s Jack, alongside Puell, remarked in his own tweet that such wedges are often never seen in bear markets, and are instead, a reversal pattern that commences a bull run. He then points to the fact that the Relative Strength Index (RSI), Chaikin Money Flow (CMF), and On-Balance Volume (OBV) readings, which measure if an asset is either technically overbought or oversold, are currently breaking to the upside.
Title Image Courtesy of Andre Francois Mckenzie Via Unsplash
Published at Tue, 07 May 2019 03:06:59 +0000
