• 314 days Will The ECB Continue To Hike Rates?
  • 314 days Forbes: Aramco Remains Largest Company In The Middle East
  • 316 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 716 days Could Crypto Overtake Traditional Investment?
  • 721 days Americans Still Quitting Jobs At Record Pace
  • 723 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 726 days Is The Dollar Too Strong?
  • 726 days Big Tech Disappoints Investors on Earnings Calls
  • 727 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 729 days China Is Quietly Trying To Distance Itself From Russia
  • 729 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 733 days Crypto Investors Won Big In 2021
  • 733 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 734 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 736 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 737 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 740 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 741 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 741 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 743 days Are NFTs About To Take Over Gaming?
Strong U.S. Dollar Weighs On Blue Chip Earnings

Strong U.S. Dollar Weighs On Blue Chip Earnings

Earnings season is well underway,…

Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

  1. Home
  2. Markets
  3. Other

Bitcoin Corrects

Bitcoin is now a lot more popular among mainstream investors than it was only a couple days ago. This is perhaps evidenced by the fact that the digital currency made its way to Bloomberg Markets homepage. In the short piece we read:

Bitcoin rose as much as 5.8 percent to an all-time intraday high of $2,999.98. The virtual currency has tripled its value since the beginning of the year amid greater acceptance of the blockchain technology that underpins the exchange method, global political uncertainty and increased interest in Asia. Skeptics have said that there may be a bubble in the making as bitcoin has repeatedly broken records without showing signs of slowing.


Interest of mainstream media

It's hard to call this in-depth analysis and the note is still buried in the amount of info on the page but the more interesting part than the note itself is that Bitcoin is now in the focus of mainstream media. It is usually characteristic to see such pieces of news right at the tops. Does this mean that the top is in? Not necessarily, however, even if it's not, current developments in the market point to important outcomes.

For now, let's focus on the charts.

Bitcoin Daily Chart

On BitStamp, the situation has almost become boring – new high every couple of days. Recall our previous comments:

Quite importantly, the volume on which the top was made was relatively significant. The volume on which the top was corrected yesterday was less pronounced. The move today (....) has been to the upside but the volume has been relatively weak to mediocre. This makes the short-term picture cloudy.

Bitcoin has gone up some more since our previous alert was posted but the move was not on huge volume. The cloudiness of the picture remains in place since the currency reached yet another all-time high, just below $3,000 but the move today has been mostly to the downside and on strong volume (this is written around 11:30a.m. ET). Even though all this has “bearish” written all over it, there's still more to the situation.


Yet another new all-time high

Bitcoin 2017 Chart

On the long-term BTC-e chart, we see the move up and its extreme magnitude. The situation is almost as incredible as it has ever been before. Recall our recent comments:

The situation is now less bearish in terms of the price move, however, it has also become even more extreme than it was a couple of days ago. Right now, Bitcoin is still at $2,700. In terms of the 3-day and one-week RSI Bitcoin is now extremely overbought. The situation now is getting close to the levels where it was in late 2013 at the previous very significant top. Could Bitcoin go further up from here? Yes. As such, we prefer to wait a little bit more before opening hypothetical short positions.

We're up from where we were a couple of days ago and the situation is more extreme in terms of the price, and possibly volume, but the move down today has not been enough to turn the situation around and we might still see a rebound to the upside. If this doesn't materialize soon enough, we might consider shorts without an additional move up. This is not the case yet. Stay tuned!

Regards,

 

Back to homepage

Leave a comment

Leave a comment