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Recovery On Shaky Ground
BTC: Price: $10,664 | MCAP: $190.86 billion | 24-Hr Volume: $14.99 billion
Short-term trend: Bearish
Bitcoin's recent bounce from lows below $9,500 seems to have convinced some observers that a higher low is in place (or the correction from $13,880 has ended) and the cryptocurrency is set to resume the rally toward record highs before the year-end.
The latest recovery, however, lacks volume support, as seen in the 4-hour chart below. A low-volume bounce is often short-lived.
Further, the recovery seems to have taken the shape of a rising wedge – a bearish reversal pattern. A wedge breakdown, if confirmed, would open the doors for levels below $10,000.
That looks likely as the weekly chart indicators are beginning to turn bearish. The 5- and 10-week moving averages (MAs) have produced a bearish crossover for the first time since February.
The weekly moving average convergence divergence (MACD) histogram continues to produce lower highs and is currently reporting the weakest bullish momentum in six months.
BTC fell 10.49 percent last week, strengthening the case for a deeper pullback put forward by the rejection above $12,000 two weeks ago.
All-in-all, there is a strong probability of BTC finding acceptance below $10,000 in the short-term.
That said, the rising wedge pattern would be invalidated if prices rise above $11,000 on the back of high volumes. The outlook, however, would turn bullish only if prices print a weekly (Sunday, UTC) close above $12,000.
Long-term trend: Bullish
Bitcoin snapped its five-month winning streak with moderate losses in July. More importantly, the cryptocurrency created an inside bar candle, a sign of consolidation or exhaustion following a stellar rally from April's low near $4,050.
Even so, the path of least resistance remains to the higher side as the bullish structure on the monthly chart is intact.
For instance, the falling channel breakout confirmed in April is still valid. The 5- and 10-month moving averages continue to trend north, indicating a bullish setup. Further, on the 3-day chart, the 50- and 200-candle moving averages (MAs) have produced a golden crossover, the first since Feb. 3, 2016.
However, a deeper correction to $7,500 cannot be ruled out, if prices drop below $9,049, validating the inside bar pattern.
That said, the long-term bullish outlook would be invalidated only if prices print a UTC close below the 200-day MA, currently at $6,417.
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Digitex Futures Leaping Ahead
DGTX: Price: $0.0589 | MCAP: $44.7 million | 24-Hr Volume: $1.08 million
Short-term trend: Cautiously bullish
Since crossing the 100-period moving average (MA) on August 4, DGTX has been trending bullishly in the short-term with a bullish daily RSI and favorable awesome oscillator (AO) supporting its moves.
There is potential for a pullback on today's current rally so be sure to account for further downside toward former resistances at $0.053 should volume evaporate for the bulls.
Long-term trend: Cautiously bullish
DGTX has also crossed bullishly above the 200-period MA (not shown) on August 19 at $0.0529 with a bullish saucer pattern on the AO signaling continuation in its price so long as it doesn't drop back below the 200-period MA.  |
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| Egretia In A World Of Hurt
EGT: Price: $0.0319 | MCAP: $135.7 million | 24-Hr Volume: $22.3 million
Short-term trend: Bearish
EGT is down 17.57 percent over a 24-hour period and continues its bearish trend of lower lows and lower highs as seen on the 4-hour chart.
The RSI is firmly oversold offering hope for a short-term bounce but given the current market momentum the odds are stacked heavily against the bulls.
Long-term trend: Bearish
The AO shows a tick down on the histogram hinting at further downside potential long-term should the bulls fail to reverse the current trend at current levels.
However, given recent breakdowns ranging from 15-30 percent it appears as though the current trend is indomitable.  |
Ether, the world's second-largest cryptocurrency by market capitalization, could take a beating in the near-term, according to the price action seen on the weekly chart.
To start with, ETH/USD or ether's dollar-denominated exchange rate closed at $195 last week, confirming a downside break of the ascending channel represented by trendlines connecting December 2018 and February 2019 lows and December 2018 highs and May 2019 highs.
That rising channel breakdown indicates the rally from December lows near $83.00 topped out at highs above $360 in June and the bears have regained control.
The widely-followed moving average convergence divergence histogram, an indicator used to identify trend changes and gauge the trend strength, has crossed below zero, confirming a bullish-to-bearish trend change.
Further, the 14-week relative strength index (RSI) has also found acceptance below $50. A reading below 50 indicates bearish conditions.
What's more, the 5- and 10-week moving averages (MAs) are trending south, indicating a bearish setup. Further, ETH tried re-entering the rising channel earlier yesterday, but failed, reinforcing the bearish reversal.
All-in-all, the stage looks set for a deeper drop to $135.00-$130.00 in the next few weeks. The bearish setup would be invalidated if prices close this week (Sunday, UTC) above $218 (previous week's high).
It is worth noting that ETH/USD almost always moves in line with BTC/USD. So, the bearish setup on ETH/USD could also be considered an advanced warning of a deeper correction in BTC.
After all, the bull run in the leading cryptocurrency is looking exhausted - BTC has repeatedly failed to close above $12,000 since the last week of June. |
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| Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. |
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