Dr. Nektarios Michail
HotForex
BTCUSD, D1
Ever since its December 2017 peak, Bitcoin has been following a downwards trend which appears to have, nonetheless, remained above the peak-to-trough (July 2017-December 2017) 23.6% Fibonacci level at 6008, albeit slowly converging towards it. Indicators are sending off signals of calmness, with RSI remaining withing the 30-70 bound since January, with only minor instances of escaping. Volume indicators are also not providing meaningful patterns, despite their increase since the start of September, and neither is the ATR, which appears to be relatively stable.
An Elliott Wave analysis does not provide much more information either: the peak in December was followed by a three-movement Wave, and a descending triangle formation. The end of the triangle could either suggest a bear market or another three-movement Wave which could lead to the bull area. At this current juncture, we are still unable to tell.
Gold appears to have a statistically negative relationship with Bitcoin price, suggesting a potential substitution effect between the two instruments, at least for the sample ranging from July 2017 to present. Further to this, Gold appears to have the expected negative relationship with the USDIndex, suggesting that a Dollar appreciation lowers the value of Gold. Interestingly, Bitcoin does not appear to have any statistical relationship with the USDIndex, given that its value does not rely on macroeconomic developments.
Where does that leave us then? At this juncture, the USDIndex appears to be on a downwards trend, while the price of Gold appears to have stabilised. This stabilisation is also evident in the Bitcoin price, which has been fluctuating between the 0% and 23.6% Fib. levels since the beginning of September. The band is quite large, ranging from 5880 to 6492, with no closing price below the USD6000 psychological barrier in the past year, other than a trough in June which was followed by an immediate reaction. Consequently, the big question is whether Bitcoin will break below this barrier, with 5- and 14-day moving averages pointing to that direction. Still, it could be the case that this trend may reverse if other news comes to light.
Disclaimer: Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of purchase or sale of any financial instrument.
Recommended Content
Editors’ Picks
AUD/USD: Extra gains in the pipeline above 0.6520
AUD/USD partially reversed Tuesday’s strong pullback and regained the 0.6500 barrier and beyond in response to the sharp post-FOMC pullback in the Greenback on Wednesday.
EUR/USD meets support around 1.0650
EUR/USD managed to surpass the key 1.0700 barrier in response to the intense retracement in the US Dollar in the wake of the Fed’s interest rate decision and Chair Powell’s press conference.
Gold surpasses $2,300 as Dollar tumbles
The precious metal maintains its constructive stance and trespasses the $2,300 region on Wednesday after the Federal Reserve left its FFTR intact, matching market expectations.
Bitcoin price reclaims $59K as Fed leaves rates unchanged
The market was at the edge of its seat on Wednesday to see whether the US Federal Reserve (Fed) would cut interest rates during the Federal Open Market Committee (FOMC) meeting.
The market welcomes the Fed's statement
The market has welcomed the Fed statement, and the S&P 500 is higher in its aftermath, the dollar is lower and Treasury yields are falling. There is still only one cut priced in by the Fed.