Technical Weekly: Positive bias, yet to call a reversal

A strong start of a week for crypto traders as the prices of bitcoin remained at around 9700 levels after the rally over the weekend. As we wrap up October, the strong upside bias remains intact in the market and it’s likely to carry on into early November trading.

Bitcoin recorded an over 40 percent daily gain on Saturday, from lows of below 7400 to high above 10300, it was the third-largest daily surge for the leading cryptocurrency in the history. Markets believe that a speech from the Chinese President attributed to the latest rally.

Chinese President Xi Jinping remarked on Friday, saying that China should speed up its adoption and application in blockchain technology. Meanwhile, China has passed a newly drafted cryptography law on Saturday, which aims to deal with new regulatory and legal disputes regarding commercial application of cryptography applications. That also indicates that China is ready to bring blockchain applications to the next level, despite bitcoin ban is still unlikely to be lifted anytime soon.

Also, the development of China’s stated backed digital currency is something traders should watch it closely as well.

OKEx is proud to be named by CryptoCompare as one of the highest trade volume crypto exchanges and the top crypto derivatives exchange globally in September. You can read the report here.

 

Price Analysis - BTC/USD

BTCUSD traded near the upper 9600 handles on Monday, which is around its 100-day moving average after the drastically surge over the weekend.

OKEx Technicals believes that the pair may have to further consolidate near the 9700 levels before beginning a new round of rally, despite the pair may have appeared to break the July-October downward channel initially.

38.2% Fibonacci Retracement of July-October downtrend is near 9800.

Before we can call a real trend reversal, we would like to evidence a positive breakout from the weekly chart (figure 2). It clearly shows that the pair is still in a downward channel.

We expect to see more short position openings in BTC after the price surge, as OKEx’s BTC Long/Short Ratio retreated from 1.81 to 1.61, which indicates some of that long positions have already locked profit, and short positions now have higher potential profit.

 

Figure 1: BTC/USD Daily Chart (Source: FX Street)

 

Figure 2: BTCUSDT Weekly Chart (Source: OKEx; Tradingview)

 

Figure 3: OKEx’s BTC Long/Short Ratio (Source: OKEx)

 

EOS/USD

Like BTCUSD, we saw an initial breakout of the downtrend in EOSUSD after the weekend rally, but unlike BTC, EOS still below its 100-day moving average (green line) and far below its 250-day moving average (purple line).

The positive sentiment in BTC has spillover to the altcoin space, and EOS could continue to benefit from it. If the pair can maintain its support at above 3.56, it could retest the 4.8 area.

 

Figure 4: EOSUSDDaily Chart (Source: FX Street)

 

LINK/USDT

OKEx Technicals has been covering Chainlink since September and it has been one of the top performers in the altcoin space as LINKUSDT retested the key levels of 3 over the weekend.

A daily ascending triangle pattern seems formed, which could be a medium-term bullish signal.

The pair could retest the support of the lower end of the triangle, which at around 2.6 level, before producing a breakout.

Also, the Bollinger Bands could have started to squeeze, which could suggest that a breakout could be on the way.

 

Figure 5: LINKUSDT-Daily Chart (Source: OKEx; Tradingview)

 

DASH/USD

• The pair may have come to a critical point as it reached the key 74.7 area, which is a major resistance since late September, and the weekend rally has sent the pair above that level but failed to maintain so far.

• If the pair can break and stay above that 74.7 levels, it could retest the 250-SMA on the 6-hour chart, which is around 77.5

 

Figure 6: DASHUSD 6-Hour Chart (Source: FX Street)