Acochain.com – After days and days of consolidation, bitcoin finally managed to break a new high for the first time in almost two weeks. This new high, so far, has been short lived, however, as it was almost immediately sold into by eager bears:
Figure 1: BTC-USD, 4-Hour Candles, New High
Our current 4-hour candle is seeing a relatively easy retracement after days and days of an upward grind. We managed to close a new high, but it was quickly rejected and, depending on where the currently daily closes, could lead to a macro reversal setup known as a Swing Failure Pattern (SFP):
Figure 2: BTC-USD, Daily Candles, Potential SFP
An SFP is characterized simply as a push to a new high that fails to close above the previous high. This is a tactic often used by large institutions to generate liquidity prior to a market reversal. In our case, since we are dealing with daily candles, this could mean we are in for a test of new lows in the mid $3,500s. If we manage to see a reversal, the first logical level to test is the $3,700 range. If we manage to close a candle below that and our prior low, we could be in for a nasty run to the low $3,000s:
Figure 3: BTC-USD, Daily Candles, Zone of Support
The red zone outlined above has been our latest level of support over the last few weeks. It also proved to be a point of resistance in the past and represents a major pivot level in our current market structure. If we break below this level, it would represent a third failed attempt to hold support and could lead to a strong, powerful move to the downside. We never retested our macro low in the $3,000 level, so we could be in for a major move to test macro support. Three failed attempts to break out of our range (all three with very powerful rejections) show that our market is still very dominated by supply within our current range.
Right now, our test of resistance is still fresh so it’s a bit early to make a macro market call. But one thing that is clear is the presence of supply. When we look at Figure 3 we can see large daily candles rejecting our tests of the $4,000s and so far we have yet to give a very strong test of macro support. So, it seems logical that after three failed attempts the likely course of action for the macro market would be a test of $3,000.
As stated, the move is still fresh so we need to take it day by day. Keep an eye out for the level outlined in red as a close below this would likely confirm a strong continuation to the downside. We have many trapped bulls at our current level and a strong move to the downside could potentially squeeze them out of the positions.
- Bitcoin finally broke a new high but was rejected immediately. This rejection sets us for a reversal called a “Swing Failure Pattern.” The failure to close above the new high could mean the a liquidity run took place for large institutions to short the market.
- On a macro level, the market failed to break out of our multi-month range three times — indicating supply dominance in the market.
- If we manage to see a strong continuation, we could easily see a test of the $3,000s before any meaningful upward progress is realized in the market.
Trading and investing in digital assets like bitcoin is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Inc related sites do not necessarily reflect the opinion of BTC Inc and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results. (bitcoinmagazine)
Bitcoin Rallies $2K in 24 Hours But Price Hurdles Remain Intact
Acochain.com – Bitcoin (BTC) has risen sharply in the last 24 hours, but a key price hurdle must still be passed to confirm a bull revival.
The premier cryptocurrency by market value was on the defensive in the early European trading hours on Tuesday, having breached support at $10,300 on the back of high volumes.
The ensuing sell-off, however, was cut short near $9,614 and prices rose back above $10,300 in the U.S. session, confirming a bullish double-bottom breakout. The price jumped to $10,700 following the breakout, as expected, and extended gains further to hit a high of $11,575 on Bitstamp earlier today.
With the $2,000 rally, bitcoin has established a base or technical support around $9,600. The quick recovery could also be considered a sign of strong demand below the psychological level of $10,000.
However, it is still too early to call a retest of the recent high of $13,880, as the cryptocurrency is yet to invalidate the most basic of all bearish patterns – a lower high. For that, the price needs to rise above the June 28 high of $12,448.
As of writing, BTC is changing hands at $11,350 on Bitstamp, representing 11 percent gains on a 24-hour basis.
Hourly and weekly charts
A high-volume break above the bearish lower high of $13,880 (above left) would confirm an end of the price pullback and open the doors to a retest of, and possibly a break above, the recent high of $13,880.
Traders may argue that the cryptocurrency has already breached the falling channel – a sign of bullish reversal.
While that’s true, the breakout wasn’t backed by a surge in buy volume (green bars). Further, sell volumes have been higher than buy volumes post-breakout – a trend that has been in place ever since bitcoin topped out at $13,800. That puts a question mark on the sustainability of gains above $11,000.
And widely followed long-term technical indicators like the 14-week relative strength index (RSI) continue to report overbought conditions with an above-70 reading. In such situations, price breakouts on the hourly and other shorter-duration charts often end up trapping the bulls on the wrong side of the market.
Hence, it’s likely safer to wait for stronger confirmation of a bull revival in the form of a break above $12,448.
BTC created a bullish hammer candle on Tuesday, comprising of a long lower wick – a sign of dip demand or rejection of lower prices – and a small body (the gap between open and close).
The hammer pattern is widely considered a sign of bullish reversal. The candle’s success rate, however, is higher when it appears after a prolonged downtrend, which isn’t the case here. Nevertheless, the candle does indicate that $9,614 is now the level to beat for bears.
That level could come into play if prices drop below $10,830 (today’s low), reinforcing the bearish view put forward by the cross of the 5-day moving average below the 10-day average. (coindesk)
Brazilian Bank Plans to Use Tezos Blockchain for STOs Worth $1 Billion
Acochain.com – BTG Pactual, Brazil’s fifth largest bank, plans to utilize the Tezos blockchain for security token offerings potentially worth $1 billion.
For the effort, BTG – also Brazil’s largest standalone investment bank – will team with Dubai-based asset manager Dalma Capital.
In a press release published Wednesday, the two firms said they would use the Tezos network for the sale of digital securities to “address a deal pipeline in excess of $1bn for existing and prospective token issuances.”
The deals include the ReitBZ tokenized property offering announced in February, and would further cover a variety of traditional and alternative investments, they noted.
The companies said:
“Utilizing Tezos, a self-amending blockchain and smart contracts platform will encourage BTG Pactual and Dalma Capital to enhance their digitization efforts, by transacting in digital assets.”
Since the announcement earlier this year, the ReitBZ STO, which uses an ethereum-based token, has launched and passed its soft cap, according to the release.
“While the bank remains protocol and technology agnostic, and will continue to utilize the Ethereum protocol, we see Tezos as a global player with a robust blockchain for asset tokenization” said Andre Portilho, a BTG partner who heads the STO initiative.
Dalma Capital has joined the effort as joint bookrunner (or underwriter) for ReitBZ, and further expects to use Tezos for a number of other asset tokenization projects, from real estate to sports clubs.
“We see Tezos as one of the critical protocols for the burgeoning STO market, and look forward to securing future deal flow on the Tezos blockchain,” said Zachary Cefaratti, Dalma Capital CEO.
Tim Draper, CEO and founder of Draper Associates, which holds a stake in Tezos, said “We are excited to see BTG Pactual and Dalma Capital making use of the Tezos blockchain – we are believers in the Tezos project and see a strong use case for security tokens.” (coindesk)
Bitcoin Eyes Independence Day Price Gains for Fifth Year Running
Acochain.com – Bitcoin (BTC) looks set to close in the green on U.S. Independence Day for the fifth consecutive year, having recovered nearly 25 percent from recent lows.
The top cryptocurrency by market capitalization rose 1.17, 1.79, 3.35 and 1.67 percent on July 4 in 2018, 2017, 2016 and 2015, respectively, according to Bitstamp data.
BTC’s Independence Day performance in the years prior to 2015 is mixed. Prices saw little change in 2012, rose 3.16 percent in 2013 and suffered a 2.63 percent loss in 2014.
All-in-all, bitcoin, considered by some observers as an anti-establishment asset, has put on a good show on the U.S. Independence Day in five out of the last seven years.
The cryptocurrency now appears poised to extend the four-year winning trend, as the recovery from recent lows seems to be gathering traction and the short duration charts are now flashing bullish signals.
As of writing, BTC is changing hands at $11,600, representing 4 percent gains on a 24-hour basis, having hit a high of $12,061 earlier today. At that price, the cryptocurrency was up more than $2,400, or 25 percent, from the July 21 low of $9,614.
BTC jumped 4 percent in 60 minutes late on Wednesday, confirming an upside break of the symmetrical triangle – a bullish continuation pattern – on the hourly chart.
Notably, the breakout was backed by a sharp rise in buy volumes (green bars). In fact, buy volume climbed to its highest since July 1, invalidating the bearish volume divergence represented by the falling trendline.
Therefore, the path of least resistance is on the higher side and prices could rise toward the bearish lower high of $12,448 created on June 26.
While the momentum has cooled somewhat in the last 10 hours, the minor price pullback seems to have taken the shape of a bull flag – a pause that often restarts with upwards momentum.
The probability of BTC posting daily gains with a UTC close above today’s opening price of $12,061 would drop if the price finds acceptance below $11,385 – the low of yesterday’s high-volume bullish candle (horizontal line).
That, however, looks unlikely, as the daily chart is reporting a bullish candlestick pattern.
BTC rose 10.5 percent on Wednesday, marking a strong follow-through to the dip demand highlighted by the preceding day’s bullish hammer candle.
The candlestick pattern indicates the pullback likely ended at $9,614 and thus prices could continue to rise toward the recent high of $13,880. (coindesk)
Litecoin Outperforms Top-10 Cryptos Ahead of August Reward Halving
Acochain.com – With the supply of new coins to be halved in less than five weeks, litecoin is outpacing its peers.
The fourth-largest cryptocurrency by market capitalization is currently trading at $123, representing 5 percent gains on a seven-day basis, according to data source CoinMarketCap.
Meanwhile, bitcoin, the top cryptocurrency by market value, is currently reporting a meager 1 percent gain on a weekly basis. Other top-10 cryptocurrencies are trading mixed as seen in the table below.
- Cardano, down 10 percent, is the worst performing top-10 cryptocurrency over the last seven days.
- ETH, XRP, BCH, and EOS are flashing red.
- Binance coin is up a staggering 481 percent on a year-to-date basis, followed by litecoin, up 305 percent.
Litecoin’s recent relatively shining performance could be associated with the mining reward halving due on Aug. 6 this year.
The process is aimed at curbing inflation by reducing the coins paid out for mining on litecoin’s blockchain by half. So, after Aug. 6, miners will get 12.5 coins for every block mined – down 50 percent from the current reward of 25 coins.
Essentially, miners will be adding fewer coins to the ecosystem, likely leading to less in circulation. The impending supply cut might have helped LTC outperform its peers in the last seven days.
While it is logical to expect the cryptocurrency to rise further in the run-up to the event, the upside looks limited. After all, LTC has already witnessed phenomenal growth in both price and non-price metrics so far this year, and is currently up more than 300 percent on a year-to-date basis.
Meanwhile, litecoin’s hash rate, or computing power dedicated to mining, rose to a record high of 468.1019 TH/s this week. Notably, the metric is currently up 220 percent from the low of 146.2118 TH/s seen in December.
All-in-all, the market may have largely priced in the reward halving already. In fact, if history is a guide, the probability of LTC witnessing a sharp pullback in the run-up to the Aug. 6 event is high.
It is worth noting that LTC had nosedived from $8.72 to $2.55 in 6.5-weeks leading up to the previous reward halving, which took place on Aug. 25, 2015.
Technical charts are also signaling scope for a near-term price drop.
While the bullish higher lows, higher highs pattern is intact, the relative strength index (RSI) is reporting a bearish divergence and the 5- and 10-candle moving averages have produced a bearish crossover.
As a result, the price risks falling to the 200-candle MA, currently at $221. A violation there would expose the 50-candle MA, currently at $83.00.
On the higher side, a high-volume break above $140 is needed to expose the next major resistance lined up at $182 (May 2018 high). (coindesk)