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Bitcoin price weekly analysis – 12.11.2018

After rising to a week high of $6,615 last Wednesday, bitcoin price progressively dropped down to a week low of $6,357 on Sunday. Even though the market’s bulls had the upper hand during the beginning of last week’s trading sessions, they were not capable of overcoming the resistance around the $6,615 price level. The market failed to continue on rising through the rising upwards channel we observed during last week’s bitcoin price analysis. A new downwards trend started last Wednesday and has been active ever since.

Bitcoin price and the news:

The chairman of the US Commodity Futures Trading Commission (CFTC) reported last week that the blockchain technology is expected to be utilized soon by the CFTC to monitor various financial markets. Moreover, a supervisor of the REACT Task Force has reportedly emphasized the high priority placed on policing SIM swapping in the state of California. On the other hand, Germany’s financial watchdog has issued an order to cease all unauthorized cross-border trading operations conducted by the UK based Finatex cryptocurrency trading platform.

The cryptocurrency exchange Gate.io was breached by hackers who embedded a malicious code in the web analytics’ script of Statcounter, which had been used by the exchange for months. Gate.io has a daily trading volume that exceeds 3,000 BTC, yet the exchange’s officials didn’t report the total number of BTC lost in the attack incident. There have been tens of cryptocurrency exchange hacks during the past few years.

Pure Bit, a South Korean cryptocurrency startup, has pulled an exit scam last week walking away with $2.73 million worth of Ethereum that they raised via their ICO that they conducted to create a crypto exchange and a mineable cryptocurrency.

Breaking through the support level around $6,422.2:

Let’s examine the 1 day BTCUSD chart from Bitfinex, while plotting the RSI, MACD, and Ichimoku Cloud as shown on the below chart. We can note the following:

BTC 12.11.2.PNG

– To identify key support and resistance levels at the current market conditions, we will plot Fibonacci retracements extending between the high recorded on September 2nd ($7,433.1) and the low recorded on September 19th ($6,109.9). As shown on the above chart, bitcoin price faced resistance around $6,615.4, which corresponds to the 38.2% Fibonacci retracement, last Wednesday after recording the week’s high. Since then, bitcoin price progressively dropped and the market’s bears managed to pull it down to break through the support level around $6,422.2, which corresponds to the 23.6% Fibonacci retracement. The next significant support level lies around $6,109.9

– The MACD indicator is bearish as the red signal line has crossed above the blue MACD line, and both have moved into the negative territory. The RSI’s value is currently 43 and sloping in a downwards direction.

– The Ichimoku Cloud is still red, which means that the market is more likely to be bearish during the upcoming week. The Conversion line (blue) has crossed below the Base line (red), which is another bearish signal, indicating that bitcoin price is most likely to continue on dropping during the upcoming week. This is also supported by the location of candlesticks below the Ichimoku Cloud.

Candlesticks drop below the upwards rising channel on the 4 hour BTCUSD chart:

Let’s examine the 4 hour BTCUSD chart from Bitfinex, while plotting the Williams Alligator indicator and the MACD indicator. We will keep the Fibonacci retracements we extended on the 1 day chart, as shown on the below chart. We can note the following:

BTC 12.11.1.PNG

– Bitcoin price dropped below the upwards rising channel (2 parallel upwards sloping trend lines) that we observed during last week’s analysis. A long downwards bearish (red) candlestick was formed last Friday, as bitcoin price dropped below the channel. As price continued dropping it plummeted below the 23.6% Fibonacci retracement too.

– The Williams Alligator’s SMAs are exhibiting a bearish alignment, as the teeth (red line) is now between the jaw (blue line) from above and the lips (green line) from below. Right now, we can say that the alligator’s mouth is open and eating in the bearish direction.

– The MACD is bearish. It is in the negative territory and the MACD blue line is below the signal red line.

Conclusion:

Even though the market was bullish during the beginning of last week rising to a week high of $6,615, the trend was reversed on Wednesday and bitcoin price has been dropping ever since recording a week low of $6,357. Our technical analysis shows that bitcoin price is most likely to continue on dropping during the upcoming week, especially that the market’s bears managed to pull price down to break through the support level around $6,422.2

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