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Bitcoin [BTC/USD] Technical Analysis: Bulls show no signs of leaving

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Bitcoin [BTC/USD] Technical Analysis: Bulls show no signs of leaving
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The world’s first cryptocurrency, Bitcoin has been holding strong above the $4,000 range with a market cap of $70 billion. Bitcoin rose by 20.55% over 30-days and the seven-day price movement shows an increase of ~5%.

1-hour

Source: TradingView

The one-hour chart of Bitcoin shows prices in an uptrend bullish movement which extends from $3,238 to $3,891. However, the downtrend extends from $4,205 to $4,062. The prices are holding steadily above the support at $3,578, while the resistance band range from $3,919 to $3,944 has been successfully breached and holding. The next resistance band range is from $4,203 to $4,239.

The Bollinger Bands shows that the prices are undergoing a squeeze and the prices are above the simple moving average, which indicates that the prices for Bitcoin are holding steady.

The Aroon indicator shows that the Aroon-green line, aka the uptrend for Bitcoin, has gained prominence, while the Aroon downline aka the downtrend has lost its dominance.

The Stochastic indicators are undergoing a bearish crossover as they failed to breach the overbought bands.

1-day

Source: TradingView

The uptrend for Bitcoin in the longer time-frame has formed but it is far away from being the dominant trend. The downtrend, however, can be seen hanging at $9,800 to $4,035. The prices are supported at $3,183, with resistance lines present at $7,359, $8,385

The Chaikin Money Flow shows that the Bitcoin market in the longer time frame has fallen below the zero-line and this indicates that the money is flowing out of the market i.e., sellers are dominating.

The Awesome Oscillator shows that the green bars are steadily rising above the zero-line which indicates that the longterm momentum is rising faster.

The Relative Strength Index shows that the momentum of the market is slightly above the neutral line i.e., very minuscule.



Conclusion

Bitcoin’s one-hour scenario shows a slightly bullish trend as confirmed by indicators, Aroon, Stochastic and Bollinger Bands.  The one-day time frame also shows a slightly bullish to a neutral trend for Bitcoin indicated by the AO, RSI and CMF.





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Akash is your usual Mechie with an unusual interest in cryptos and day trading, ergo, a full-time journalist at AMBCrypto. Holds XRP due to peer pressure but otherwise found day trading with what little capital that he owns.

Bitcoin

Bitcoin [BTC] and the US Dollar: Halving mirror effect on fiat would result in FOMO explosion

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Bitcoin [BTC] and the US dollar: Halving mirror effect on fiat would result in FOMO explosion
Source: Unsplash

Bitcoin’s halving, scheduled for May 2020, has everyone talking, with many focusing on the mining rewards that will be enforced after the event.

One among these theorists is Anthony Pompliano, Managing Partner at Morgan Creek Digital, and outspoken Bitcoin bull. In a recent tweet, Pompliano equated the top cryptocurrency’s halving principle to the top fiat currency, the US Dollar [USD].

Pompliano focused the effect on the banking class, which has been leaning towards the cryptocurrency market off-late with the crypto-craze turning the likes of Fidelity, Etrade, and JP Morgan. Another important premise for the USD-halving effect was the ‘unlimited supply’ of the fiat currency, which can be minted by the US Federal Reserve, unlike Bitcoin which has a fixed cap of 21 million.

The Morgan Creek executive suggested, based on the above premise, that if the USD endured a periodic halving, bankers would be “FOMOing” all over the place.

His tweet, in full, hypothesized,

Presumably, Pompliano’s tweet was meant to reflect the supply-control inconsistencies of the USD versus Bitcoin, and the reaction of the banking class to the same, from an investment point of view.

Frances Coppola, a prominent financial journalist, hit back at Pompliano for mulling this mirror effect from within his “bubble.” She stated that USD supply is decreasing due to the Fed ‘burning’ fiat currency, rather than printing more of it, with the intention of reducing the supply on a “permanent” basis.

She responded,

Pompliano responded by questioning if Coppola believed that the US government does not engage in the printing of its fiat, to which the latter responded that her statement was in reference to the Fed “reducing the supply” by burning USD.

Despite this back-and-forth and the “printing” and “burning” of fiat currency, as opposed to cryptocurrency, is the will of a single entity, the US government. On the flipside, Bitcoin and its halving takes place with the production of every 210,000th block, or every four years.

This halving cuts rewards, which currently stand at 12.5 BTC per block and are set to drop to 6.25 BTC per block in May 2020, thereby aiming to self-control the supply of BTC in the market. As mining rewards dip, miners would shy away from the market as their profits are cut in half. This ‘fear’ would cause an increase in the price for the cryptocurrency to continue production. Hence, the inflationary effect is balanced.

Unlike the USD, Bitcoin being decentralized does not have one entity controlling supply. Hence, “printing” or “burning” cannot take place at will to control macroeconomic factors. This point, despite not being emphasized by Pompliano, is an important demarcation between Bitcoin and the fiat world.



To further the debate, Coppola added that the halving would in fact, dent Bitcoin’s prospects of being a world currency. In light of the cryptocurrency falling short of this feat, she stated, “Bitcoin is an asset, not a currency,” referencing the words of Chris Cook from Market 3.0.

Cook’s “Currency paradox,” detailed the equation of Bitcoin as a method of payment relative to its drop in liquidity that will happen periodically with the passing of every halving. The “Currency paradox” read,





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