2018-10-31 04:03 |
Bitcoin has formed higher highs and higher lows to trade inside an ascending channel on its 4-hour chart. Price is down to support and may be attempting to break lower. In that case, a reversal from the uptrend might be seen.
The 100 SMA is above the longer-term 200 SMA, though, so the path of least resistance is to the upside. In other words, there’s a stronger chance for the uptrend to resume than to reverse. Then again, the moving averages might simply be oscillating to reflect range-bound conditions.
Stochastic is indicating oversold conditions, though, which means that sellers are exhausted and might be willing to let buyers take over. In that case, bitcoin could bounce back to the channel top at $7,000 or at least until the middle of the channel at $6,700. The moving averages might also hold as dynamic resistance levels.
RSI has just reached oversold territory itself and has yet to turn higher to signal a return in bullish momentum.
Cryptocurrencies have had a rough time as the outage in Canada’s MapleChange revived fears of security risks in the industry. Recall that this was one of the concerns raised by the SEC in rejecting earlier bitcoin ETF applications, so the regulator might highlight the lack of measures in related markets as a reason to deny the pending ones from SolidX and VanEck.
This could also discourage more institutional investors from placing bets in the industry, even as there is more availability of platforms to do so. Fidelity will be making its platform more widely available and is expecting higher volumes by the first half of 2019, possibly spurring the highly-anticipated rebound in bitcoin then.
It didn’t help that remarks from former Fed head Yellen downplayed the use of bitcoin as a store of value and potential currency. She cited:
“It has long been thought that for something to be a useful currency, it needs to be a stable source of value, and bitcoin is anything but. It’s not used for a lot of transactions, it’s not a stable source of value, and it’s not an efficient means of processing payments. It’s very slow in handling payments. It has difficulty because of its very decentralized nature.”
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