Technical Weekly - BTC shows resilience amid slower market conditions

The broader cryptocurrency market was mostly in the positive area on Monday as sentiment has shown signs of improvement compared to a week ago. The prices of bitcoin have been hovering in the 7500 area during early Asia trading. Although most of the previous selling pressure seems has been eased, we haven't seen a substantial recovery in bitcoin at the moment. However, the consolidation could also present an accumulation opportunity for long-term HODLers.

In the altcoin space, XTZ and ALGO continued to lead the gains, traded 8% higher against the USDT. Away from that, most of the altcoins have only seen small gains, while LTC, TRX, and XMR were slightly dipped into the red. ETH is expected to remain in focus, as the second-largest crypto has performed the latest hard fork successfully. Istanbul contains six unique upgrades to improve Ethereum's network, including reducing some of the gas costs and allows ETH and ZEC to work with one another.

Elsewhere, Europe has continued to dominate in the crypto macro headlines. This came after the report saying France is set to test its own central bank digital currency. Recent research from Deutsche Bank suggests that digital currency could eventually replace cash one day, as demand for anonymity and a more decentralized means of payment grows. However, EU officials stressed that private digital currencies like Facebook's Libra should not be allowed in the bloc until risk concerns have been addressed.

 

What You Missed

• Telegram's former chief investment advisor is expected to reveal more details about the firm's 2018 token pre-sales project. The SEC has requested the High Court of England and Wales to transfer documents related to Telegram's USD 1.7 bln token pre-sales back in 2018. The papers are expected to disclose the fundraising tactics used during sales.

• BTC's on-chain momentum has started to produce a bullish crossing, that's according to renown On-Chain Analysis Willy Woo. He claims that investors' momentum is likely already bottomed, and some of the smart money could be frontrunning for the upcoming BTC halving event.

• Crypto investors in Korea could soon need to pay taxes for their gains in crypto. The Korean Times reports that the Ministry of Economy and Finance is working on a taxation framework for capital gains in crypto, and the measure is expected to become law next year.

• The US Secretary of the Treasury Steven Mnuchin said he is "fine" with Facebook's Libra as long as it fully complies with all the rules. During a hearing at the House Financial Services Committee, Mnuchin said, "I'm fine if Facebook wants to create a digital currency, but they need to be fully compliant" with financial secrecy and anti-money laundering rules, and in no way can this be used for terrorist financing."

 

Price Analysis

BTCUSD

• BTCUSD has initially produced a daily breakout from the October downward trendline, and an ascending triangle pattern could be in the making. If confirmed, that could consider as a short- term bullish signal.

• While the recent price actions may not look so excited, the RSI suggests that upward momentum has been building up gradually.

• Our data shows that a significate volume of active buys have been rushed into our BTC futures trading, alongside with the low BTC Long/Short Ratio, that could indicate that the short-term bias remains slightly more on the positive side.

• From a medium-term perspective, the recent trend we've seen on BTCUSD looks somewhat comparable to the June-July trend highlighted in figure 1.

• For a longer-term perspective, a 50-100 weekly bullish crossover has confirmed (figure 4a), that's the first of such crossover since May 2016 (figure 4b), which was the start of a mega bull run till late Dec 2017.

Figure 1: BTCUSD Daily Chart (Source: FX Street)

Figure 2: OKEx BTC Long/Short Ratio (Source: OKEx)

Figure 3: OKEx BTC Futures Taker Buy and Sell (Source: OKEx)

Figure 4a: BTCUSD Weekly Chart (Source: FX Street)

Figure 4b: BTC Long-term Weekly Chart (Source: FX Street)

ETHUSD

• ETHUSD may need to retest the support of the lower end of the recent triangular pattern before another attempt to make a bullish breakout.

• Despite both the RSI and UO have able to produce some higher lowers, the stochastic oscillator has seen a bearish crossover, supporting a case of a short-term correction.

• As the Istanbul hard fork has performed successfully, markets seem lacking any short-term factors that would able to boost the prices of ETH. However, the upgrade would certainly be an underlying positive for ETH.

Figure 5: ETHUSD 4-Hour Chart (Source: FX Street)

 

XRPUSD

• XRP bulls may face more challenges as XRPUSDT has come to a critical moment. At the time of writing, the pair traded 1% higher, changing hands in 0.2288 area.

• The pair has formed a daily mini-double bottom and reached the neckline near 0.232 levels. A rally from here would allow the pair to surge to near the 0.25 area.

• However, momentum indicators have shown a mixed-signal here with the RSI developed an uptrend, while the UO yet has seen a breakout.

• If the pair were unable to secure the neckline, the likelihood of retesting the lower support levels would be more likely.

Figure 6: XRPUSD Daily Chart (Source: FX Street)

BCHUSD

• BCH may soon start a new trend as the squeeze of the Bollinger Bands suggests that a daily breakout seems in the making.

• While it could be hard to determine the direction of the breakout at this point, the downside here seems relatively limited, as the trendline near 192-193 seems like good support.

• On the upside, 226 and 240 areas are likely to be the next resistance levels.

Figure 7: BCHUSD Daily Chart (Source: FX Street)

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