Aug 1, 2020 07:20 UTC
Aug 1, 2020 at 09:16 UTC
Cryptocurrency Price Analysis: BITCOIN (August First Week)
Bitcoin, the world’s first and the largest cryptocurrency (by market capitalization) with it’s P2P property and decentralised nature based on blockchain technology took the world by storm when introduced in 2009. Since then the asset has experienced a major meteoric rise and fall in it’s prices every year.
On Monday, Bitcoin experienced a 11.14% leap in it’s prices from the previous day setting a new benchmark of $11,420 for the first time this year and closing at $11,048 on the same day.
The asset crossed it’s $10,500 resistance and $11,000 major resistance setting up a new resistance at $11,500 and $12,000 with $10,500 being the least support price.
It is said to be ready to cross the $14,000 high or even reach $20,000 by the end of the year according to some analyst.
The Average True Range (ATR) responsible for measuring the volatility of the market showed a multi-year low “202” point which usually indicates that an explosive breakout is likely to occur. Consequently, the asset crossed it’s major $11,000 resistance (check chart above) highlighted by the blue horizontal line.
SHORT TERM PREDICTION: BIT/USD
Examining from the technical levels, The Relative Strength Index (RSI) a Momentum Measuring Indicator points out an Overbought Market Condition originating from the starting of this week at a top 82% on Monday and 80% at the time of writing. This usually means that the asset is already trading at a price above its a fair value ($11,420 on Monday). Typically, this is followed by a setback which was visible the next day when the market closed at a bearish $10,934.
However, the bullish trend was regained a day later and the asset is yet again trading at a bearish $11,101 by the time of writing.
The indicator suggests a price correction is on it’s way, with the asset struggling to hold above 80.
On the contrary, the existence of a visible divergence gap between price and the EMA
Suggests a bullish trend to remain intact for a short period of time.
Furthermore, it is clearly visible that the shorter moving average (EMA 26, MA26) is crossing and rising above the longer (EMA 50) which further proves the above theory that the bulls have an upper hand and there shall exist an incoming bullish trend for a shorter period of time.
Moving Forward, The On Balance Volume (OBV) a momentum indicator which operates using Volume of the trade indicates an uptrend Market flow. It can be noted that (chart above)
OBV declined after the day of highest spike advising a major selling pressure by the bears looking to take profit from the sudden rise. However, the Momentum was regained by the bulls pushing the volume higher and hence chances of pushing the price up from a short-term point of view.
Key Resistance level: $11,216, $11,434 (highlighted with blue)
Key Support level: $11,088, $10,761 & $10,524(highlighted with red)
Incorporating the above indicators, it can be said that the asset will continue a bullish trend if the prices closes above the $11088 support level or/between $11,216 initial resistance.
Below that a short-term bearish trend can take place.
LONG TERM PREDICTION: BTC/USD
Michael Novogratz, the Wall Street Billionaire believes that the leading Cryptocurrency will hit $20,000 by the year end.
The Coin exhibited a massive spike over the past week and the longer EMA (EMA150) falling below the price signals a strong long-term bullish uptrend.
Looking at the preceding chart, a similar spike was experienced last year with the Bitcoin trading at a high $13,800. However, the coin again experienced a massive downfall closing at $7200 by the end of the year.
The OBV oscillator indicates an immense selling pressure which can be said due to long term profit-motive bears. The bears wait yet again for the price to fall as to enter the market again.
It can be said that, if the bulls keep the buying pressure on, the market could end at $14,000 or more by the end of the year.