The market's sideways drifting seems inexorable, and the lack of trend means a dearth of market signals currently – hence this is my first TA post in a couple of weeks. However things are slowly being pushed towards a conclusion.
Last week saw yet another successful test of the blue uptrend, and BTC is now pushing into the apex between that trend and the purple wedge top, implying a likely conclusion this week.
The high volume inverted hammer excitement a few days ago perfectly respected the downtrend with the candle close exactly on it, showing bears were still ready to defend that line – however the lack of follow-through since then has been cause for hope, with price bouncing off the 50 day MA (blue) over the weekend.
Saying that, the Bitfinex chart looks rather different to some of the other exchanges (and yes, I'm charting everything in USD not Tether, before you wonder!)
The Bitstamp chart has the BTC price still under the 50 day moving average, and the tip of the candle wick stopping exactly on the purple downtrend, rather than the real body. Interesting difference. This implies that a potential breakout from the imminent apex on Bitfinex may be constrained initially as other exchanges lag.
Looking at this chart in isolation, the sideways drifting could easily last until late November (when the downtrend hits the main uptrend channel bottom) – let's hope not, for sanity's sake.
ETH is in a holding pattern, trading sideways after a successful retest of the downtrend (green arrow). This is a bullish sign, however the inverted hammer just after negated the momentum, hence the drift since; everything's back to waiting for BTC to make the first move.
More consolidation on XRP, with the action forming a rough triangle. Nice defence of the 50 day moving average (blue) last week is encouraging, but of course the 200 day (red) is just above, which along with neutral momentum oscillators puts the action into no-man's land until we see a BTC breakout catalysing the market.
Litecoin is trading sideways just to the right of its downtrend, at major support. The chart's slightly precarious in that that support doesn't extend much lower, but I'm not overly worried since the inter-coin correlations are so high again. Once again, it's down to BTC to conclude the stalemate.
BCH continues to push into the apex of its bull wedge. This is a pattern that feels ready to conclude, and most of the time bull wedges do so upwards.
The number of short contracts open on Bitfinex looks to be probing just below its uptrend, and MACD has turned downwards. It'll be interesting to see if this acts as a catalyst – either way with 32,600 contracts open there's still plenty of rocket fuel for a BTC rally.
Conclusion: the current tedium won't be relieved until we see BTC either break out of the pennant top or below the blue uptrend. Bitfinex is hinting the former might happen this week, the other exchanges are more neutral. Barring extrinsic influences we simply have no choice but to wait it out.
BCB Group has no position or opinion on the price of Bitcoin or any other cryptocurrency and this article should not be construed as analysis of or advice regarding the current or future market price of Bitcoin or any other cryptocurrency. No analysis of the price movements of BTC or any other cryptocurrency or any other asset provided by BCB Group should be construed as an invitation or inducement to buy, sell or otherwise to trade BTC or any other cryptocurrency.
Strategy and Execution Partner
Jon is BCB’s head strategist, with an emphasis on market intelligence. An expert in behavioural science and highly experienced chartist, Jon has been providing BCB’s clients with crypto and macro technical analysis since 2017, and has quickly gained a reputation for accuracy after correctly calling the December 2017 top and August 2018 bottom.
Jon is also MD of British music production company Poseidon. He began studying technical analysis in 2000 due to its overlap with behavioural economics – much used in Poseidon's international marketing work, which has seen the company achieve three iTunes US number one albums among other notable successes.