Bitcoin (BTCUSD) price analysis: don’t fight the trend, short to $3,470

Looks like crypto may be about to test lows under $4,000 given the lack of forward momentum. Bitcoin is at $4,137, according to coinmarketcap, down 2.5%.

Most of the market has ticked lower around 2%.

A fundamental tenet of trading is to not fight the trend and as the s chart below shows the downtrend has not been broken since the 14 November drop.

Staring reality in the face means of you want to make money at this juncture the easiest way to do it is to short on the 4-hour candle at $4121 with a $3,470 target for a 15.7% return.

This translates to a risk/reward ratio of 1.5, which means for every dollar advanced there is a profit of 50 cents. The risk/return ratio should typically be at least 1.5 to 2.0.

But to protect your position a stop-loss should go in at $4,556, which is the most recent high. A move north of that level could signal an attempted breakout from the downtrend.

Our chart shows a $1,000 dollar position, which if the trade holds as planned would provide a profit of $650.

BTCUSD 4-hour chart Bitstamp

NEO tech problem, Bitcoin Cash “centralised”

NEO is down 2.9% to $8.09, in line with the rest of the market. Things could have been much worse given the news that there’s a bug in its code that could allow token to be siphoned off. Those were the findings of Chinese internet giant Tencent.

Bitcoin SV (BSV) continues to close the gap with Bitcoin Cash. BSV is one of the few coins in the green today, 5% higher at trading at $101, while Bitcoin Cash has lost 1.5% and is priced at $173.

Helping to narrow the gap may be the publication of a Medium blog by an anonymous Bitcoin Cash developer. He or she criticises Bitcoin ABC (now BCH) for a number of technical changes to the protocol that have made it centralised, in particular the checkpoint implementation. If the anonymous dev is right then the criticism made by the SV camp may well be valid. It might also be added that at least the BCH SV crowd are focusing on upgrading the protocol while on bitcoin development has ground to a halt post SegWit.

It is a long post but here is one of the most salient parts of the post the mystery BCH dev:

“What’s interesting about this centralized checkpoint is that it provides both the reason AND the means for a powerful adversary to take down the network in the future. They simply need to attack the associated ABC cartel, leveraging the centralized checkpoint to do whatever they want to the chain once compromised. And you wouldn’t even know what went on as a user.”

The poster includes a video which on the face of it appears fairly damning:

“Here’s a recorded livestream video where they explain, step by step, how this “capture the ticker mission” was accomplished by a cartel of ABC developers and crypto exchanges (instead of through Proof of Work):”

Coinbase is not listing BSV at this point, which may prove to be a mistake if BSV becomes more valuable.

In other news, in Japan there are reports that the Financial Services Agency is about to embark on a crackdown against initial coin offerings. That could end up being another hole in the ICO coffin, as the more serious projects in the space pivot towards to security token offerings.

 

 

 

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