BTC Technical Analysis (August 16–24)
Bitcoin price has struggled to regain the same powerful bullish momentum it had starting in April through July. The bulls are struggling to maintain their tides in the market but the market was quivering around $10,000. Traders on twitter started confirming their confidence that Bitcoin will never drop significantly below $10,000 However, that fall deep below $10,000 may be coming sooner as the weekly MACD bending down suggests the prices to reach below $9000. If $10,000 breaks, one crypto analyst says that Bitcoin may fall below the median range toward the lower trading range, which as a bottom $6,000. The weekly stability of the market is currently against this statement. Looking at the daily chart, Bitcoin is playing a higher trading zone 10,500–11,100. Hence, a close above the high end of the zone could push the price to the high end.
2 days ago, Momentum is clearly pointing down, and which suggested Bitcoin may cycle upwards to reach a desirable price between $10,000–14,000, or it might flow with the momentum to the lower half of the trading range from $6,000 to $10,000. The market appeared to gain its volatility and the prices dropped significantly on August 21. Some of the cryptocurrency experts claim Bitcoin is showing its response towards the USA-China trade war as the investors started switching their investments to safe havens like Gold and Bitcoin. Last week, there were incessant debates that compared Gold to Bitcoin as pro-Gold and pro-Bitcoin experts argued their assets to reach $5000 and $50,000 respectively sooner. Where BTC trading volume saw aa surge of 284% from May to August 2019, Gold’s prices have also increased by 83%. The devaluing of Yuan and an increase in tariffs from 10% to 15% on goods and services restricted Chinese traders to slid their potential last week. This week, the tensions have eased and the pressure which the Yuan suffered last week reduced, this ameliorated the wounds BTC prices endured.
Bitcoin (BTC) moving averages have flattened out after turning down in the middle of the week. The RSI has again dipped back into the negative zone. This shows a balance between buyers and sellers. There is a strong sell-side sentiment in the traders on tradingview.com. The support stands at $9080 and if it breaks, the BTC/USD pair can plummet to $7,500. Conversely, if the pair rebounds sharply from $9,100, it is going to produce a series of buying opportunities which can take the prices above $12,000. Bulls are buying higher each time and a series of high bur orders and low sell orders has resulted in the formation of a symmetrical triangle. Symmetrical triangle is prevalently followed by a downtrend which extends the downtrend line of the triangle.
The market has to wait for another breakout for the uptrend to recur. This produces a buying opportunity for traders at that breakout and hence, traders might consider putting Stop loss orders at $9000. If this uptrend rally crosses the $14,000 market, it is possible that the price of BTC can go as high as $17,000 by the end of the next month. On the other hand, this uptrend will be invalidated if the moving averages turn down again and the prices will be back to the $9100 resistance level. The MACD is an indicator that can help predict trend changes by gauging the buying or selling momentum. It is possibly the first time since BTC touched 20,000 that MACD is turning down in the coming weeks. This is alarming for the prices if the bulls don’t start supporting their sentiments and reverse this trend.
Altcoins have lost their value significantly in the past week and their ratio with BTC continues to deteriorate.
Below shows the next 3 support and resistance levels for the upcoming week.
Support and resistance levels for the upcoming week
Below is the figure which shows the share major cryptocurrency exchanges hold in the BTC/USD market.
Daily trading volume distribution of BTC in exchanges
According to coinmarketcap, these are the top 10 exchanges based on trading volume which have traded BTC with any currency or altcoin. Asian cryptocurrency exchanges all over the world faced tremendous problems when Amazon cloud service AWS experienced an outage which is causing a service disruption. KuCoin, Binance, Bitmax, and other Asian exchanges explained their issues on twitter.
Amazon states on its website:
“Due to the overheating of part of our chassis in the machine room we deployed in AWS, Tokyo, part of our services might become unavailable. The engineering operation team is currently deploying relevant resources of high availability across regions to deal with any possible emergencies that might happen. Some services might be affected during the deployment.”
Amazon now states that the disruptions have been resolved. On August 23, a screenshot started to circulate on social media allegedly showing the order book data from BitMax — it appears that traders could’ve bought a BTC for 0.32 USDT which means while you’d (at the time of writing) pay USD 10,180 per BTC, you were able to buy 45 of them for USD 0.32 per coin. BitMax announced that “due to abnormal market fluctuations, the exchange has temporarily suspended trading service for certain accounts” — those which had traded during 1:00 a.m. — 3:30 a.m. EDT on August 23rd. “Trading of these accounts will be resumed upon completion of confirmation and follow-up measures”, the announcement states. Hence the current rankings on trading volume (7 days) on coinmarketcap are clearly distorted by this incident. This mishap didn’t affect the BTC/USD pair as the exchanges in the American continent running on USA’s AWS didn’t face any issues. Coinbase still holds the largest market share in BTC/USD trading pair.
Top 10 cryptocurrency ranked on the basis of 7d trading volume
Market share of 7d trading volume BTC/fiat trading pair