Connect with us

Analysis

Bitcoin [BTC/USD] Technical Analysis: Doom-December brings terrible tragedy as BTC breaks another major support

Avatar

Published

on

Bitcoin has collapsed by a massive 12% in less than a day and the prices are currently trading at $3300 range with market cap losing a whopping 82.35% from its
Source: Unsplash

Bitcoin [BTC] has collapsed by a massive 12% in less than a day and the prices are currently trading at $3,300 range with market cap losing a whopping 82.35% from its all-time high, and is currently holding at a mere $59.33 billion. The seven-day price change for Bitcoin shows a 19% decrease.

1-hour

Source: Trading View

The downtrend for BTC in the one-hour time frame extends from $4,750 to $3,375, with no sign of an uptrend for a very long time. Bitcoin has broken the long-standing support at $3.605 and set up a new support at $3,320. The resistance points for Bitcoin can be seen hovering at $4,750 and $4,345.

The Bollinger Bands, as indicated in the chart above, show that it is in a state of expansion as volatility has kicked in. The price candles are collapsing below the simple moving averages, indicating an oversold market.

The MACD indicator shows the lines which have come eerily close to each other and signaling a possible bullish crossover, but it indicates a bearish zone for BTC at the time of writing.

The RSI touched the bottom-most part of the oversold zone and has recuperated as it came near the 30-line.

1-day

Source: Trading View

The downtrend for Bitcoin prices in the one-day chart shows an extension from $9,799 to $3,433 with no uptrend as usual. The prices in the one-day time frame have broken the strong support at $3,730 and have dipped further down as the collapse seems to have no stop. The resistance points for Bitcoin at $7,360, $8,390, and $9,800 are moving further away from the price candles as the prices dip.

The Aroon indicator shows a perfect depiction of the current scenario for Bitcoin as the Aroon down-line has hit the 100-line indicating that the downtrend is in full strength.

The Chaikin Money Flow has sunk to the negative side of the zero-line indicating that the sell-off is trending and that the buyers have lost control.

The Awesome Oscillator shows red bars hanging below the zero-line which shows that the shorter momentum is rising faster than the longterm momentum.



Conclusion

The one-hour chart as indicated by the indicators above shows a bleak hourly movement for BTC. The one-day is just as bleak as the one-hour chart and the same is indicated by the indicators Aroon, CMF and the Awesome Oscillator.





Subscribe to AMBCrypto’s Newsletter




Follow us on Telegram | Twitter | Facebook



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

Avatar

Published

on

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,





Subscribe to AMBCrypto’s Newsletter


Continue Reading

Trending