December 5, 2018

Bitcoin Price Looking to Retest Yearly Low at $3,455 as Bears Gain Foothold

The bitcoin price on Wednesday plunged as much as 4.3 percent as the market continued to erase gains made during the weekend trading session.

The BTC/USD index on Coinbase today established an intraday low at 3663-fiat after the 50-period moving average on the hourly chart capped the upside attempt. The pair nevertheless is trending inside two distinctive channels. As noted in our previous analysis as well, one of these patterns is a symmetrical triangle (depicted in bold purple). BTC/USD is testing the triangle support at the time of this writing with a 50-50 chance between a bounce back and an extended selling action.

However, it is the second pattern that is hinting that the bitcoin price will fall even further in near-term. Depicted in purple dots is a falling wedge scenario. According to this channel, the pair may attempt to retest its 2018 low at $3,455. The market could witness a rebound action near the said downside target, but even a breakout scenario could find it difficult to establish a sustainable bullish correction.

Coming back to our symmetrical triangle, a hint of a reversal from its support could merely have the bitcoin price target 50-period SMA as resistance while eyeing the triangle resistance to the upside. In either case, the upside action could validate the falling wedge formation, which traditionally results in a breakout action.

As far as technical indicators are concerned, the BTC/USD market is pretty bearish as of now. The RSI momentum indicator is on the verge of slipping into its oversold area, and the MACD indicator is already trending inside the negative territory.

BTC/USD Intraday Positions

The range we are watching for today has 3588-fiat serving as interim support and 3900-fiat as interim resistance. It is a pretty wide range to apply our intrarange strategy. That means entering a long towards the resistance level on a bounce back from the support level and entering a short position on a pullback action from the resistance. As we do, maintaining a stop loss order just $10 in the opposite direction of the price action would protect our risks.

The technical indicators tell that BTC/USD bearish action should continue. Therefore, we will keep our eyes on the potential short targets more than the long targets. If the pair breaks below the dotted wedge support, it would have us enter a short towards 3588-fiat while maintaining a stop loss just $10 above the entry position. A further break below the said level would have us go into an idle state while expecting the invalidation of this year’s low.

Trade safely!

Featured Image from Shutterstock. Charts from TradingView.

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Published at Wed, 05 Dec 2018 19:40:41 +0000

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Litecoin Has Outperformed Bitcoin in 2017, 8,000% Increase in Price

Litecoin has outperformed bitcoin in 2017, demonstrating a staggering 8,000 percent increase in price. While it still remains as the fifth largest cryptocurrency behind bitcoin Cash and Ripple, it has solidified itself as a leading digital currency.

Since January 1, the price of Litecoin has surged from $3.63 to $302, as its market cap increased from below $177 million to $16.4 billion. The market valuation of Litecoin is currently larger than that of bitcoin in the beginning of 2017.

Potential Factors Behind Rally

Over the past 12 months, the bitcoin dominance index has decreased from above 80 percent to 56 percent. Several analysts have attributed the decrease in the bitcoin dominance index to the migration of users from bitcoin to alternative cryptocurrencies (altcoins) such as Litecoin and Ethereum that have significantly lower transaction fees than bitcoin.

At the time of reporting, the median transaction fee of Litecoin is around $0.065, while Ethereum’s remain above $0.5. Due the high transaction fees of bitcoin, many users have started to utilize Litecoin to process cheaper and small transactions.

bitcoin Fees, a bitcoin transaction fee prediction platform developed by Earn.com (formerly 21 Inc) show that the fastest and cheapest transaction fee is 430 satoshis per byte, or 97,180 satoshis for median-size transaction. That is, a recommended fee of around $18.

When the size of the bitcoin mempool is below 50 million bytes or is relatively low, transactions can still be confirmed by miners with lower fees. But, when the size of the bitcoin mempool is larger than a hundred million bytes, without high fees, it is difficult to have transactions confirmed within 24 hours.

More users have begun to utilize Litecoin and other alternatives like Ethereum to process small transactions with cheaper fees, while relying on bitcoin as a robust store of value and safe haven asset.

Still, Litecoin creator and former Coinbase director of engineering Charlie Lee emphasized that it could take at least five years for general consumers to utilize bitcoin and litecoin in the real world.

“I think we’re still maybe five years away before people actually start using bitcoin and litecoin in real world use as a currency,” said Lee.

Where Does Litecoin Price Go in 2018

In consideration of the recent surge in the price of litecoin, Lee stated that he would be satisfied if the litecoin price stays in the $300 region by the end of 2018. That is a rather conservative prediction from Lee, as litecoin has increased by more than 83-fold year-to-date.

“I would be happy if litecoin stays at around $300 by the end of next year. It’s still very surprising how much it has grown this year. I never like to speculate on prices because I’m always wrong. If I tell you it’s going to go up and it doesn’t, you’ll be upset,” said Lee.

If more users continue to utilize litecoin for cheaper transactions and small payments, the user base and market valuation of litecoin will likely increase at a rapid rate throughout 2018.

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