Bitcoin Bounces, But Stuck On First Resistance — Price Analysis

  • Short term trend: A relief rally may have some more legs
  • Long term trend: Downtrend obtains

Days after Bitcoin’s (BTC) capitulation out of the previous local market structure, the inevitable relief rally has started coming in. But after about 12% of upside, BTC has encountered the first line of resistance on the way up. And placed within the larger downtrend that has formed, we should be cautious about expecting more upside.

We can see the move on the 3-hour chart, and see that it was preceded by a bull divergence on the RSI. This was a pretty standard counter rally after a major move, and the price gain has come to a halt precisely at the the previous low put in during October.

Bitcoin starting to lose this bounce levelBTC chart by TradingView

The moving averages are starting to slip after being held for a while; and the histogram has started accelerating to the downside. On this chart, if price can ultimately hold above the EMAs, we may see some extended upside in the short term.

Backing way up to the 3-day chart, we can see the broader scope of where price is. Bitcoin has now completely left the main structure of latter 2019, and has begun to wade into important price territory from 2018. This makes sense, as the leading crypto basically blew through this region on the way up, in H1 of 2019; and price action tends to fill in regions where relatively less trading has occurred.

The likely structure in the coming x timeframeBTC chart by TradingView

On this chart with Volume Profile indicator, we can see the first support of the downtrend – derived from 2018 bear market resistance – has already been tested, and is holding so far. The orange band is where a very high amount of trading occurred during 2018, with support for that region being $6,000. Thus, $6,000 will here serve as strong support, if Bitcoin gets that low. We should also note here that volume on this week’s dump has not been especially high relative to other large price movements from late 2018 and 2019.

Finally, looking at the daily chart, we see that a potential spinning top reversal candle has been painted yesterday – potential because it needs follow-up/confirmation today. This makes sense, as the RSI is deeply oversold. The histogram is also starting to arch up nicely.

Could be an extended bounceBTC chart by TradingView

We should watch the 8 EMA, here. If a daily candle can close above the 8, we might see an extended bounce. We should also note that the buy and defense volume put in yesterday was quite good, although there was some selling on the candle.

In sum, we are already getting a bounce on Bitcoin, and the possibility exists for a  more extended one. However, we should bear in mind that we have a clear downtrend on the indicators; the saving grace here may be that it is a weak downtrend, in terms of sell volume.

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

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Luxury Cars and $15 Million in Crypto Seized in Chinese Arbitrage Scam Bust

Michael LaVere
  • Chinese authorities seized $15M in crypto and several supercars following scam ring bust.
  • The group was allegedly operating an arbitrage scam that promised users fake Huobi Tokens. 

Chinese authorities have reportedly seized more than $15 million in crypto-assets and $2 million in supercars after busting up an arbitrage scam selling counterfeit tokens. 

According to a report by China’s Ministry of Public Security, police in the city of Wenzhou arrested 10 individuals connected to operating a fraudulent cryptocurrency scheme. The report claims the arbitrage group was scamming victims using blockchain smart contracts to generate fake cryptocurrencies. 

Following the bust, authorities seized bitcoin, ether, and tether worth over 100 million yuan ($15 million). The report also claims police seized several supercars, including a Ferrari and a McLaren valued at more than $2 million, in addition to the luxury villa in which the scammers were staying. 

The arrested individuals had reportedly operated a smart contract scheme since 2019, which advertised a blockchain product that claimed to generate Huobi’s native token HT. Unsuspecting consumers were promised the tokens would generate arbitrage opportunities worth a return of up to 8%. 

One victim, identified as Li in the report, first notified police after joining a Telegram group belonging to the scam artists. 

Li told authorities, 

Simply put, you send one unit of ETH to a designated address, you will receive 60 HT. And then you can sell it to gain the difference.

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