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 CryptoGlobe.com and do not constitute financial advice. Always do your own research.

Featured Image Credit: Photo via Pixabay.com

Cannabis Shops Turn to Crypto Apps Amidst Coronavirus Cash Shortages

Michael LaVere
  • Cannabis shops in Boulder, Colorado are using bitcoin payment app Strike to conduct "contactless" exchanges.
  • Cash shortages and lack of sanitation are causing businesses to find alternative means for transaction. 

Cannabis shops are using bitcoin payment services to conduct business in place of fiat amidst the coronavirus pandemic. 

According to a report by CoinDesk, cannabis dispensaries in Boulder, Colorado have been onboarded to the closed beta for Strike, a bitcoin payment service application founded by lighting network supporter Zap. 

Zap, founded by Jack Mallers, has been operating a closed beta for the payment application Strike which allows users the option of sending bitcoin or dollars and receiving funds in their bank account. The application uses a simple QR code interface, similar to Venmo, that allows users to send funds without having prior knowledge or expertise with bitcoin. 

Mallers said, 

Every Strike user is given a public domain at strike.me. We’re using Lightning for really fast online settlement of value transfers. … It’s also beneficial for privacy on the sender’s side.

Johnny Kurish, general manager at Boulder’s Helping Hands Herbals cannabis shop, said the application allowed his dispensary to process $1,000 worth of purchases since being added to the beta last week. 

Kurish said the dispensary will switch to only accepting Strike payments, which allow for contactless exchanges in light of the coronavirus pandemic. 

He said, 

We’re really lucky to have curbside drop-offs. We check the ID through the roll-up window, deliver the cannabis to a podium in front of the car. We’re happy to reopen with an option that’s safe for our staff.

Featured Image Credit: Photo via Pixabay.com