Bitcoin (BTC) price analysis: treading water but that might be a good thing

btc image

Bitcoin has been trending sideways over the past couple of days, following the Tether-induced volatility of recent days. In fact bitcoin is still trading at a premium of around $300 on Bitfinex.

Indeed such is the subdued nature of the crypto market right now, some might traders might prefer the fun and games in equity markets over crypto at this stage.

Seriously though, bitcoin is trading at $6,376 on Coinbase, down 1% over the past 24 hours. The striking thing about the BTC chart is the canyon pattern (see 1-hour chart below), with a flat trough that persists for a few days until the next distinct price movement.

Meanwhile, hedge fund guru Mike Novogratz of Galaxy Digital has been revising his price targets again, now saying it is unlikely for BTC to break $10,000 this year. He’s looking for new all-time highs in the first half of 2019.

“…I think Q1 [or] Q2 [2019] if the institutions start coming in, we’ll put in new highs,” he told Bloomberg.

BTC 1-hour chart 9:50 UTC+1 19 October

Canyon pattern

The canyon pattern above suggests price movements are dependent on a relatively narrow field of players. Hedge funds are thought to be particularly active at the moment, although many of there deals will be over-the-counter and so purchases won’t affect prices on exchanges. However, the extent to which hedge funds are involved in the market right now  may be overstated.

We say that because Coinbase, one of the best known names in crypto in the US, has decided to close its Coinbase Index Fund due to lack of interest from institutional buyers after just four months.

The second canyon is not complete in our 1-hour chart – that completion requires a breach of the 50-day moving average (green line).

However, with daily trading volumes at a paltry 3.7 billion, the canyon pattern to some extent belies the real fragility in the marketplace. That’s why some commentators believe another dump is necessary, to squeeze out the last of the hot money from December last year. BTC price sits below all the main moving average points: 50MA, 100, MA and 200MA – that’s not good.

btc

Bitcoin is currently trading below the three main moving averages (red 200; blue 100; green 50).

Our final chart is a reminder that the descending triangle is still forming, and given the low volatility by crypto standards, we see another attempt at breaking resistance at $6,600. But it could go either way.

Descending triangle: when will it end?

Sentiment hasn’t been helped by a report from CipherTrace on Wednesday highlighting the extent of crypto theft, with exchanges and investors losing $927 million in the first none months of this year.

Altcoin latest

Crypto market cap has dropped to $207 billion with most top altcoins off 2 or 3%. NEO is down 5% at $16.34. Ripple’s XRP is priced at $0.455.

Qtum has pulled back 3% to $3.81 after the announcement of its deal with Amazon Web Services to support the building of its blockchain as a service on Amazon’s market-leading cloud service.

 

About the Author

Gary McFarlane
Gary has been writing about cryptocurrencies since 2013 and currently works as the cryptocurrency analyst at interactive investor, the UK's second-largest online investment platform. Gary contributes for Coin Intelligence News in a personal capacity and none of his commentary should be considered investment advice. Gary is the winner of the ADVFN International Financial Awards 2018 Cryptocurrency Writer of the Year. Contact Gary on twitter at: @gary_mcfarlane

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