Bitcoin [BTC] lost weight on Wednesday as prices fell from $3444. 71 to $3227. The upward sloping -DMA came to the rescue and ensured the virtual currency trimmed some losses to end the day around $3290 levels.  The currency seems to have regained the bid tone to trade around $3350 levels this Thursday morning in Europe. 

As per coinmarketcap.com, Bitcoin has dropped 07% in the last 24 hours. Ether and Ripple have dropped 3.45% and 5.10%, respectively. The newly created Bitcoin Cash [BCC] has tanked 10.57%. The market cap of the crypto currencies stands $121.68 billion and the BTC dominance rate is 45.6%. 

‘Real dollars are at work here’, says Goldman Sachs

“Whether or not you believe in the merit of investing in crypto currencies (you know who you are), the real dollars are at work here and warrant watching", says Goldman Sachs in a Q&A note published on crypto currencies.     

Essentially, the investment bank is asking investors/clients to believe in the rally, although volume chart tells us something else. 

Daily chart - Prices drop, Volumes surge

We have repeatedly taken note of the bearish price-volume divergence over the last few days. Now, I am even more convinced that the virtual currency could witness a major pull back, given the volumes surged/breached the downtrend line on the negative price action day. 

So what we have is a combination of low volume on positive days and high volume on a negative day. 

It indicates that, “the real dollars may not be at work” contrary to Goldman’s claim. Unless we don’t see strong volumes on the positive price action day, the scepticism will prevail. 

Resistance

  • $3444.71 [previous day’s high]
  • $3504 [100% Fib extension of the July low - July 21 high - July 26 low]
  • $3806.95 [100% Fib extension of the March low - June high - July low]

Support

  • $3272 [5-DMA]
  • $3234.18 [1-hour 100-MA]
  • $3113 [10-DMA]

View

  • The pull back from the high of 3483 to $3227 [yesterday’s low], coupled with a spike in the volume on the negative price action day as discussed above indicates the bull market has run out of steam. 
  • The upticks are likely to be met with fresh offers and a more pronounced pull back to $3100-$3000 looks likely in the short-term. 
  • On the higher side, only an end of the day close above $3504 would revive the bull market trend, although we would want to see a spike in the volumes as well. 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD rebounds, steadies above 1.0400

EUR/USD rebounds, steadies above 1.0400

EUR/USD has staged a rebound and reclaimed 1.0400 during the American trading hours on Friday with the US Dollar Index retreating from the multi-week high it set at above 105.60. Nevertheless, the pair remains on track to close the week in negative territory. 

EUR/USD News

GBP/USD climbs to 1.2050 area, looks to post weekly losses

GBP/USD climbs to 1.2050 area, looks to post weekly losses

GBP/USD reversed its direction and advanced to the 1.2050 area after having dropped to 1.1976 earlier in the day. The pair is still down more than 1% on the day with safe-haven flows dominating the financial markets following the disappointing PMI data from the US.

GBP/USD News

Gold rebounds above $1,800 as US yields fall sharply

Gold rebounds above $1,800 as US yields fall sharply

Gold has regained its traction and recovered above $1,800 after having slumped to a multi-month low below $1,790. Following the dismal PMI data from the US, the benchmark 10-year US Treasury bond yield is down more than 6% on the day, fueling XAU/USD's rebound.

Gold News

Why traders are rushing to exit positions on Cardano’s ADA price

Why traders are rushing to exit positions on Cardano’s ADA price

Cardano (ADA) price has had its performance review as the summer kicks off. ADA bulls are returning home with not-that-good a scorecard, and the underperformance could cut short holiday funding for the cryptocurrency.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Majors

Cryptocurrencies

Signatures