Bitcoin staying put for now
Today, we have a kind of funeral here as we analyse an instrument that unfortunately seems to have died about two weeks ago: bitcoin. On the 15th of October, we had a huge rise (which was later partially retraced), and I think that this led to the lack of volatility we’ve seen over the following weeks. BTC’s volatility has all but disappeared. One of the most popular features of this cryptocurrency is gone.
The price of this crypto asset is locked in a rectangular pattern between 6,340 and 6,470 USD (orange areas). As long as we remain within this range, we have no trading signal. The best way to deal with this is to wait for a breakout. A breakout of the upper orange area will give us a short-term buy signal, while a downwards breakout will give us a sell signal. The most important area for the long-term situation is the yellow zone at the bottom of the chart, which is the ultimate support for the whole of 2018. A breakout of this level will open the gates to hell for BTC.
There is also another important factor here that should be mentioned, which is the blue downwards trend line. It’s actually the upper line of a descending triangle pattern. The price has broken through this, which in theory should bring us a buy signal. In my opinion, we were just pushed out of the triangle. This was not a breakout, so there is no buy signal. From this formation at least, my outlook on BTC is rather negative.
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