Over the last 13 weeks, despite its ups and downs, the price of the leading cryptocurrency has gone through a process of consolidation. Even now it is trading between two very strong support and resistance levels. The range defined by the 200-week EMA and the 200-week SMA is narrowing however. A breakout is imminent, but will it go upwards or downwards?
For those who kept their eyes on BTC TA during November of last year, the currently ongoing price consolidation most likely conjures up uneasy memories. In November, a similarly drawn-out period of price stabilization was followed by a 50% drop.
The two key indicators to watch are – as mentioned – the 200-week exponential moving average and the 200-week simple moving average.
November 2018’s relevance in the current setup is more obvious still when we consider that it was then that the price dropped below the 200-week EMA. Subsequently, the EMA was turned into a formidable resistance, not breached since.
In its stead, the SMA stepped up to the support role. During the last 3 months, it has indeed successfully propped up the price three times.
Currently, the two levels are located at the $4,100 and $3,400 marks respectively. With the price contained within this range, it is safe to state that the current outlook is neutral.
To drag the bears back into the picture, a firm break (weekly close) below $3,400 is required. If this scenario materializes, the price will drop to sub-$3,000 levels, probing new depths of the current bear market.
On the upside, by logging a weekly close above $4,106, the price would break the EMA resistance, opening a path all the way to $5k.
Of the two possibilities, the bullish one is the more likely. Or so TA says. Several indicators have been trumpeting the end of the bear market for some time now.
The daily chart shows a prominent target for the bears too. Defined by the February 27’s long tail doji candle, this target is located at the $3,658 price level. A drop below that will apparently revive the bears.
What about the fundamentals? While news have been mostly positive, there has been a definite negative tinge seeping into the flow lately – at least as far as BTC is concerned.
Various YouTube-based crypto talking heads have decried the fake nature of BTC trading volumes lately. Apparently, the seemingly rising trading volumes are generated by wash trading.
Still others have pointed at a recent, sudden drop in these volumes, perhaps caused by nothing more than Binance’s 5-hour downtime earlier in the day.
That said, there have been plenty of positive news out there as well. IBM has apparently entered the crypto race. The company has developed a crypto custody solution, on its own private cloud, making use of its own encryption technology.
Instead of using it itself, IBM will apparently offer this solution to various entities interested in providing digital asset custody services, among them banks. High net worth individuals interested in custody solutions are also targeted.
In other news: Bcause LLC, an operation which fancies itself a “one stop shop” cryptocurrency ecosystem, is looking to adopt the Nasdaq Financial Framework to launch a spot market, complemented by a derivatives clearing service and crypto mining.
The derivatives-focused part of the offering is yet to receive CFTC approval and it looks like Bcause LLC has already discussed the issue with regulators.
Market surveillance technology is an important part of the Financial Framework. It would provide the operator with a tool to combat manipulation and illicit behavior.
Such an approach would indeed be a very welcome one for the crypto industry as a whole.