About a week ago, we were telling you about the tightening trading range of BTC’s price, and – though we thought it would make an upward breakout – we also dangled the possibility of a drop outside that range, which would open the doors to $6.1k. That’s exactly what transpired a couple of days ago, when a sudden $200 drop dashed the hopes of the bulls for good. Where to now though? The trading range seems to be tightening again, around the $6,280 mark.
The above mentioned narrowing trading range was located around the $6.4k mark, where the price of the leading cryptocurrency hovered for 10 straight days (quite possibly setting some sort of a record in the process) .
What exactly does all this mean in terms of price-dynamics? Following a long battle, the bears overcame the bulls yet again, meaning that they are now in control and thus further price-drops are indeed possible.
Why is the target set for $6.1k though? In technical terms, that level makes perfect sense, for several reasons: first of all, the 21-month EMA support is located at $6,109. Also, the trend line defined by the August and June monthly lows is at $6,094.
Why is the 21-month EMA considered a strong support? The selloffs from the $20,000 ATH have all run out of steam around this mark – as far as the monthly chart is concerned.
The bears really need to be on the lookout around these levels, especially considering the fact that the breakeven price for miners is around the $6k mark too, and it has proven to be a formidable support level in the past.
The current dominance of the bears is underscored by the 10-day and 5-day EMAs too. The stochastic oscillator has turned downwards as well on the 1-day chart, though it has not yet reached oversold territory. It is below 50, as is the RSI and the MACD executed a bearish cross as well.
So what is the conclusion, and what would it take for the bulls to turn things around?
First off, as said above, a visiting of the above substantiated $6.1k support level is highly likely.
If that support is broken through, the month may wrap up with the price below the 21-month EMA – which would be quite the boon for the bears.
To stand any kind of a chance of turning things around, the price would have to end the day above the 10-day EMA, located at $6,355. That however, given the current price of $6,279 – does not seem likely.
What does the birds-eye view of the technical situation say?
Sell is obviously the order of the day, with the MAs completely in lockstep with the bears. Some 13 of them scream Sell, while only the Hull MA dares swim against the tide.
The oscillators on the other hand are quite undecided: some 7 of them that is. The Buy/Sell vote-ratio is currently 2-2.
Though they struck a more positive tone over the last couple of weeks, the fundamentals are now back to their usual, largely irrelevant “mixed” status.
BofA (Bank of America) has recently secured the patent for a device used to store cryptographic keys. Does that mean that the banking giant is looking to get into crypto?
While the said patent does bring up cryptocurrencies, it is as yet unclear what the intentions are behind the device.
In other news: former Fed Chairman Janet Yellen declared herself “not a fan” of cryptocurrencies at an event in Canada – quite unsurprisingly, we may add. In a 5-minute speech, Yellen brought up the oft-used arguments of volatility, hacking and investor risks, in what probably went down as a lackluster showing in the eyes of the crypto conference participants.
Forextraders' Broker of the Month
BlackBull Markets is a reliable and well-respected trading platform that provides its customers with high-quality access to a wide range of asset groups. The broker is headquartered in New Zealand which explains why it has flown under the radar for a few years but it is a great broker that is now building a global following. The BlackBull Markets site is intuitive and easy to use, making it an ideal choice for beginners.