Bitcoin price analysis – Break of $6,000 or breakout to $12,000?

• BTC nearing a point of breaking out on the long term.

• Falling wedge suggests, it should be upside breakout.

Bitcoin, the largest cryptocurrency by market capitalisation and defacto King of the crypto world, has been trading in a broad range of $6,000-$7,000 for past many weeks and is now reaching a point where it is potentially make or break for the bulls.

BTC/USD is down one cent of a percent at $6,185 in less than one percent range for the day, in a sign of lower weekend volatility. After falling from the upper end of the range, which is also a descending trendline resistance, BTC is now heading towards lower end of it – around $5,900.

This wedge formation, although has failed many times in the past, could be one positive trigger that the bulls were searching for. If bulls manage to bounce from the lower end of this range, then the next move on the upside should result into a breakout with potential targets of beyond $12,000 in the next few months.

BTC/USD daily chart:

 

Manoj B Rawal

FXStreet

 

Alan Zibluk Markethive Founding Member

 

Bitcoin price analysis – BTC/USD recovery attempts capped by $6,200; Bitcoin not as volatile as it may seem, research shows

• BTC/USD movements are contained by $6,100-$6,200 range.

• Researchers proved that Bitcoin volatility matches traditional markets.

After a short-lived dip to $6,060 low on Thursday, BTC/USD found a floor at $6,100. The recovery attempts have been limited by $6,216 handle so far, which means that a stronger trigger is needed to push the coin out of this range. BTC/USD is changing hands at $6,190, mostly unchanged in the recent 24 hours.
 

Bitcoin's technical picture

A sustainable movement above $6,200-$6,216 congestion zone will open the way towards $6,300 followed by SMA50 (1-hour) at $6,340, where fresh selling interest is likely to appear. However, if this area is cleared, the upside movement will start gaining traction with the next aim at the broken downside trendline at $6,480 strengthened by SMA200 (1-hour) and psychological $6,500.

On the downside, the critical support is located at $6,100, strengthened by Thursday's low at $6,060, Once below, the sell-off will continue to $6,000
 

Pretty stable
 

A recent study performed by Stanislaw Drozdz from the Institute of Nuclear Physics of the Polish Academy of Sciences revealed that Bitcoin is much more stable than it might seem. The researcher found out that the coin market is very similar to traditional financial markets in terms of stability.

“When new emerging financial markets started to appear in Central and Eastern Europe after the collapse of socialism, the question of their stability naturally arose. A number of statistical criteria were identified at that time, making it easier to assess the maturity of the market. We were curious about the results we would get if we used them to look at the Bitcoin market, currently valued at hundreds of billions of dollars,” Stanislaw Drozdz wrote.

The research team analyzed Bitcoin prices in a period from 2012 to April 2018 and the rates of return over the same timeframe. They found out that the volatility of rates of return is comparable to mature markets.

 

Tanya Abrosimova

FXStreet

 

Alan Zibluk Markethive Founding Member

Bitcoin Reaches Record-Low Volatility

It’s an open secret that trading in bitcoin has become more difficult in recent months than it once was. Traders rely on volatility to make their money, and with less volatility, there are fewer opportunities to trade. For long-term holders and users of bitcoin, however, it’s a very different story, and low volatility is generally seen as a sign the bitcoin market is maturing.

According to Gil Luria, research director at wealth management firm D.A. Davidson & Co., the recently stable bitcoin prices means that there is less speculation in the bitcoin economy.

“When speculators are involved, they drive unusually high volumes as well as volatility by trading the asset with high frequency. As speculator involvement is diminished, volumes go down and volatility goes down as well,” Luria told Bloomberg.

The same sentiment was also echoed by Mike McGlone, commodity strategist at Bloomberg Intelligence, explaining that bitcoin is now exhibiting signs of a “maturing market, so volatility should continue to decline.”

“When you have a new market, it will be highly volatile until it establishes itself. There are more participants, more derivatives, more ways of trading, hedging and arbitraging,” McGlone said.

Judging from the data, it appears the experts are right that both trading volume and volatility is down. Although most notably for bitcoin, the data confirms that the same is also true for many other cryptocurrencies.

The unusually low volatility in bitcoin is confirmed by a technical indicator known as the Average True Range (ATR) indicator, as seen in the bottom of the chart below. Looking on a day-by-day basis, volatility in the bitcoin market is now down to levels not seen since July 2017, before the huge run-up in prices seen later that year.

Bitcoin’s Next Move

Although volatility may be low at the moment, bitcoin’s price chart looks like it is about to break-out from a massive chart pattern that has been forming since the beginning of this year.

Judging from the pattern seen above, with lower highs but a floor around the USD 6,000 mark, it appears that bitcoin is about to face another battle between bulls and bears that will determine its next move.

As we have seen throughout 2018, the selling pressure has been heavy on bitcoin, but buyers have consistently shown up at USD 6,000 to support the market. Over time, sellers have become exhausted as they have not been able to drive the price further down, and we have seen lower volatility as a result. The next few weeks may give us an indication of which side is stronger in the fourth quarter of 2018.

Meanwhile, a new informal poll indicated that the usually very cautious Wall Street investors are now overwhelmingly calling a bottom in the bitcoin market. Twitter users, however, are still skeptical, with a majority saying bitcoin still has room to fall.

In either case, the next time you read a price prediction from an expert trader, you should probably take it with a large grain of salt.

 

By Fredrik Vold

October 08, 2018

Alan Zibluk Markethive Founding Member

New Cryptocurrency Research Shows 7 Out Of 10 American’s Feel “Uncertainty” Regarding Bitcoin

Clovr recently decided to hold a research study, resulting in a publication called “How Do American’s Feel About Cryptocurrency?” In this research, which involved 1,000 Americans, the group aimed to “to understand their feelings about cryptocurrencies and to break down whether excitement (or fear) is the overwhelming emotion toward virtual money.” Ultimately, about 70% of Americans agreed that they felt “uncertainty” regarding cryptocurrency.

The information gathered in this study came from respondents that were abled between 18 and 80, though the average age is 36 years old. Participants engaged in the study by using the Amazon Mechanical Turk platform, which is a data-entry opportunity for individuals to fill out surveys and perform other work that pays out for participation, starting at $0.01.

The majority of Americans, about 9 out of 10 according to the study, have some kind of knowledge about cryptocurrency. Of that 90%, about 75% of Americans “feel they know what cryptocurrency is,” and “over 20% of the remainder believes they ‘sort of’ know what’s going on.” Clovr noted, “Almost 70 percent of respondents felt ‘uncertainty’ summed up their emotions regarding cryptocurrencies.”

When surveyed about why the participant would want to get involved with cryptocurrency, the top reason seemed to be “of riding the bitcoin wave or possibly getting in on the ground floor of an alternative like Litecoin or Ripple could most certainly pay massive returns … if they take off.”

Approximately 40% agreed that they would be more likely to participate in cryptocurrency if someone they knew was involved, which is just another demonstration of the “fear of missing out” (FOMO). About a third of the Americans surveyed already are involved in the cryptocurrency space, but the details showed that men “are twice as likely as women” to be already involved in cryptocurrency.

One of the other details included in this survey had to do with the income that participants made each year, determining if there was any correlation. Over half of the investors in the cryptocurrency industry have an income of between $75,000 and $99,999 annually. However, less than half of the participants that make under $25,000 took the time to do so. Still, Millennials “were almost twice as likely as any other generation to be crypto-investors.

The study concludes by saying,
 

“Americans appear to be divided in opinion over cryptocurrency and its role moving forward. It’s also apparent that while many think they know what it is, when asked whether explaining it to others was feasible, fewer believed they could do so, indicating a superficial understanding.”

 

Alan Zibluk Markethive Founding Member

Bitcoin price analysis – Narrowing ranges, moment of reckoning is here

• BTC on verge of breaking out of the range.

• Upside breakout more likely than the downside.

Bitcoin, the defacto King of cryptocurrencies, is on the verge of breaking out of its month old ranged trading which has been trapped between $6,000 on the downside and $7,000 on the upside.

 

BTC/USD is down 0.25 percent on day at $6,569 and is stuck in less than 1 percent range for the day – speaking enough of the shrinking volatility and low weekend volumes. On the 360-minute chart, Bitcoin has been trading in a range which has now narrowed down to the point where it can only break out or down.

 

Chances of BTC breaking out on the upside are higher than otherwise, given the earlier trend before it fell into this range.

BTC/USD 360-minute chart:

 

 

Manoj B Rawal

FXStreet

Alan Zibluk Markethive Founding Member

Bitcoin Price Starting to Reverse, 2 Catalysts Will Drive it Higher in 2018

Throughout 2018, Bitcoin has continued to record lower highs, testing major resistance levels at $10,000, $8,000 and $7,000. According to Fundstrat’s Tom Lee, the stability of Bitcoin at $6,000 regardless of its lower highs is optimistic.

In early 2018, Fundstrat emphasized in a report that the $6,000 level will likely be held by Bitcoin in the mid-term because it is the breakeven point for miners. That means, miners that utilize electricity and mining equipment to verify transactions on the Bitcoin network can still generate some profit if the price of Bitcoin stays above the $6,000 level.

Lee explained on Bloomberg that the stability of BTC at the $6,000 mark and two major catalysts awaiting BTC in the year end could push the price of BTC up substantially within the next two months.

Bitcoin daily price chart on September 30, provided by Coincap.io

“$6,000 is a level that is more important than we realized. Earlier this year, we were pointing $6,000 as breakeven for Bitcoin mining so that level should hold. The fact Bitcoin is holding here is very good news. I think there are catalysts in the year end so I think despite the lower highs we’ve seen I think we’re starting to reverse,” Lee said.
 

What are the Two Catalysts?

According to Lee, two major factors will contribute to the increase in the price of BTC by the end of the year: strengthening infrastructure of the cryptocurrency exchange market and fear of missing out (FOMO) amongst institutional investors.

Over the past few months, Bakkt, a cryptocurrency exchange created by ICE, Starbucks, and Microsoft, has been building the first regulation-focused platform that primarily aims to operate as a trusted custodian and brokerage for large-scale investors.

Eventually, with the entrance of major investment banks and solid products offered by Bakkt, Lee stated that institutions will have the ability to enter the market.

But, echoing the sentiment of billionaire investor Mike Novogratz who previously stated that institutions will likely not commit to the crypto market until Bitcoin surpasses major resistance levels at $8,800 and $10,000, Lee emphasized that Bitcoin will have to show some recovery in its price before it appeals to many institutions.

“I think there is a few. One, this new exchange called ICE Bakkt will be launched. It is going to be really one of the first regulated exchanges. I think around that, there is working being done by these major investment banks to build products to support it or work with it. I think institutions are waiting to be involved,” he said.

How Will Bitcoin End 2018?

In early 2018, Lee reaffirmed his price target of $25,000 per BTC. The cryptocurrency market is quickly approaching the end of 2018 and it is becoming increasing unlikely for the dominant cryptocurrency to reach an all-time high by the end of the year.

Still, given the stability of BTC at $6,000 since late July, it is possible for the asset to show strength and momentum by November and December, a period in which the cryptocurrency market historically tend to record large gains.

Alan Zibluk Markethive Founding Member

Bitcoin Price Analysis – BTC Acquires “Safe Haven” Status After Brexit Woes

All in all, Bitcoin prices are on an uptrend. Backing these are boosting fundamentals with investors anchoring their bullish hopes on Bakkt, the ICE subsidiary. The platform will make use of Microsoft technologies for expediency. Regardless, our previous trade plan holds true. Even with a modest three percent gain in the last week, we need to see strong gains above $7,000 or safely $7,200 for trend continuation. Thereafter we shall recommend large volume buys with targets at $10,000.

Latest Bitcoin News

At current levels, Bitcoin prices are not only vibrant but are bottoming up. Bitcoin prices are up roughly $500 from last week’s lows. Factoring in candlestick formations, it appears that there is more room for upsides thanks to spikes in market participation levels.

All eyes are now set on Intercontinental Exchange (ICE), the owners of the New York Stock Exchange. The ICE plans on launching a new regulated “on-ramp” platform for institutional investors, merchants and retail investors to trade, store and spend various digital assets through

All aspects of the existing futures market will, for the first time, be part of physical delivery and warehousing of Bitcoin

Bakkt will utilize MS cloud solutions with backing from traditional Wall Street companies and crypto funds as Starbucks, BCG and Fortress Investments. Once they get the green-lights, Bitcoin prices will likely on a high by the end of the year as investors rush to invest. In fact the optimism is so high that Michael Novogratz, the Former Managing Partner at Goldman Sachs said it is impossible for Bitcoin prices not to test $10,000 by the end of the year re-affirming his previous stands on price.

Bitcoin Technical Analysis

Weekly Chart

Though there is optimism in the market, our last Bitcoin trade plan is solid and on course. From the weekly chart, it’s clear that Bitcoin prices are on a consolidation. As they oscillate within a $1,200 range with supports at $5,800–$6,000 support and $6,800–$7,200 resistance level, our Bitcoin buy triggers would only go live once there are conclusive surges above the resistance trend line separating buyers and sellers at around $7,200—Sep 2018 highs. Besides the ranging market, the $6,000 level is proving to be a solid foundation for Bitcoin buyers.

After all, BTC sellers have so far retested $6,000, six times. Every time sellers fail to breach these resilient floors. Overly, this is good for BTC optimists. It goes to show how important $5,800–$6,000 level is from our analysis.

Daily Chart

Before Sep 18 surges, $6,500 or Sep 17 highs were our minor resistance level. Cementing our decision to anchor suitable stops and buy triggers at $6,500 was those high trading volumes of Sep 17.

Notice that average volumes before Sep 17 bearish engulfing candlesticks were low. Besides, we would strong reasons to hold on to short positions because Sep 18-20 candlestick volumes were low. However, after Sep 21 price explosion at the back of high volumes, sells were nullified and short term bulls were triggered with first targets at Sep 5 highs at $7,300.

In the course of this week, it’s likely that Bitcoin bulls will follow through. In that case conservative buyers would only enter long trades if and only if there is Sep 21-like breach above $7,000–$7,200. Thereafter, we can recommend loading on pull backs in lower time frames with first targets at $8,500 and later $10,000.

 

DALMAS NGETICH | SEPTEMBER 24, 2018 | 4:30 AM

Alan Zibluk Markethive Founding Member

Bitcoin At $7000, Undervalued Or Overvalued?

At $7,000, Bitcoin can be both undervalued or overvalued, depending on how the “intrinsic” value of the digital currency is calculated.

After testing the $6000-mark for a while, Bitcoin has staged a big comeback lately. In the last seven days, the digital currency has rallied 6.15%, trading close to the $7,000-mark. Other cryptocurrencies have rallied in sympathy—see table 1 and Table 2.

Table 1

Coin %7d

Bitcoin (BTC) 6.15%

Ethereum (ETH) 1.35

XRP 3.22

*As of 8/31/2018, at 4pm.

Source: Coinmarketcap.com

 

Table 2

Number of Cryptocurrencies That Advanced/Declined In The Top 100 Ranks Over The Last Seven Days

Cryptocurrencies Advance/Decline Number

Advance 84

Decline 16

*As of 8/31/2018, at 4pm.

Source: Coinmarketcap.com

The rally in cryptocurrencies have some experts cheering. One of them is Global Blockchain CEO, Shidan Gouran, who sees a 'hard value' at$6000. “What this means for the present is that motion is already happening. Because it costs about $6,000 to mine a Bitcoin, it couldn’t go too much lower than that. If no one sees any value in it, it will naturally only command its ‘hard value’ price of about that much. But as we can see, people clearly do see value in it. For example, the efforts to legalize a Bitcoin ETF are persisting. Further, story after story is hitting the news about big-name institutions taking steps to trade Bitcoin. While the idea of these big-time uses of Bitcoin were nothing more than a fantasy about a year ago, the signs are actually starting to emerge that it’s going to happen. So undoubtedly, this is stimulating demand to some degree.”

Clement Thibault, Senior Analyst at Investing.com, doesn’t share Gouran’s enthusiasm. "$7,000 is a level we've seen before so I don't regard it as a particularly noteworthy milestone,” says Thibault. “Psychologically, there might be something to it for speculators but the price is completely disconnected from any meaningful fundamentals. If the level was the result of an event, development, or adoption, that would be something more substantial — but at this point, we're trying to invent a narrative to explain the price action when there's nothing to explain."

What do econometric models say? My co-author of an academic paper on Bitcoin valuation, Greg Giordano, ran three econometric models — the Haye’smodel, the Wheatley model, and the Market Model (our own)—see table 3.

On the one side, the Hayes’ model and the Market Model estimate the Bitcoin’s intrinsic value to be $8,778.11 and $8,335.54 respectively. This means that at the current price level the digital currency is undervalued.

On the other side, Wheatley’s Model estimates Bitcoin’s value to be $1,080.58. This means that at the current price the digital currency is overvalued.

 

Table 3

Three Estimates Of Bitcoin’s Intrinsic Price*

Econometric Model Price Estimate

Hayes $8,778.11

Wheatley $1,080.58

Market Model $8,335.54

 

 

Panos Mourdoukoutas

Contributor

 

Alan Zibluk Markethive Founding Member