Bitcoin Breaks Up from Local Range, Can It Reverse Downtrend? - Price Analysis

  • Short term: potential for another leg up, but cautioun advised for fakeout
  • Long term: a fight to reverse a longer downtrend is playing out

Ever since breaking down from a huge consolidation period three-ish weeks ago, Bitcoin’s (BTC) trend has looked generally down. The leading crypto had been range-bound between roughly $8,400-7,800, in what looked like a solid bear flag presaging further losses -- until yesterday. Bitcoin broke clean through the $8,400 area to $8.7k, posing at least the possibility of climbing back up into the lost consolidation range.

Starting on the 12-hour chart, we see the local structure which has been -- at least for now -- left behind. It was looking like a basic bear flag, and indeed it still could be. But oodles of buy volume poured in last night (October 9, UTC), breaking a tepid volume profile.

Creeping upBTC chart by TradingView

Follow through is now needed from the bulls to capitalize on this bump. Otherwise, a return to the local range will look like a failed breakout, and price will come down with more momentum with the chance of breaking clean through $7,800.

Moving to the daily, we see that price is stopped neatly at the 21 exponential moving average (EMA). This is also about where the 0.382 Fibonacci retrace level is located, from the previous swing high. If Bitcoin has any chance of reclaiming the lost consolidation zone, at around $10k, it will have to carve deeper into the retracement range -- past 0.618 at least.

Needs more to break downtrend -- much moreBTC chart by TradingView

We see that this pump came after a clear bull divergence on the RSI, in very oversold territory. The histogram is already starting to arch down, however, at time of writing. Bitcoin needs more here, to push this bar up into a more bullish configuration, or else it will likely presage a drop back down to the local range.

Finally, getting close on the 1-hour chart, we see that the bears are aggressively trying to throw back this uptrend at time of writing. What had been a nice flattening on the histogram’s bottom side, setting up well for another leg up, has been pushed down with substantial selling at $8,630.

Bears are pushing backBTC chart by TradingView

Price is now being testing in this new structure’s support area, which extends to about $8,500. The plus side to this selling is that, if Bitcoin can hold here, the RSI has got some much needed cooling-off, and can be set up to run again.

We should know soon if this pump is one stair in a new counter-trend, or just a breakout-fakeout that will soon crash back -- and maybe through -- the previous $8,000-ish market structure.

The views and opinions expressed here do not reflect those of CryptoGlobe.com and do not constitute financial advice. Always do your own research.

Featured Image Credit: Photo via Pixabay.com

Tim Draper Reveals He Owns Cryptocurrencies Other Than Bitcoin

Michael LaVere
  • American venture capitalist Tim Draper revealed owning more crypto-assets than just bitcoin.
  • Draper expects the value of bitcoin to increase as a result of the Federal Reserve's money-printing tactics. 

American venture capitalist and bitcoin bull Tim Draper claims to own “a lot of other cryptocurrencies” in addition to BTC. 

Speaking in a recent interview with British entrepreneur Rob Moore, Draper claimed that his diversified portfolio in crypto-assets had led to him being “surprisingly up” despite the economic impact of the coronavirus. 

He said, 

You know, when I played Monopoly, I never showed anybody how much money I had so so that you're not gonna get an up or down.

Draper also criticized the U.S. Federal Reserve’s money-printing response to the COVID-19 pandemic, which he said would lead to the dollar crashing in value. He claimed the impact of the falling dollar would drive more value into bitcoin. 

He said, 

There are only 21 million of them and they are going to be more and more valuable as you see governments have less and less.

Draper continued, saying his experience working as a venture capitalist and interviewing entrepreneurs has given him a “pretty good view” of what the future is going to look like. He expects governments to move towards decentralization in a competition for their own citizens. 

Featured Image Credit: Photo via Pixabay.com