Bitcoin Weekly Update #16
By 4C Trading — 30/12/2019 :
This analysis is intended for swing traders or medium-term investors. As a reminder, swing trading is a strategy of speculation in financial markets where an asset is held only for a few days to take advantage of price fluctuations. In this analysis, which you will find every week, I will detail my vision of the market and more specifically the one of Bitcoin. In addition to a technical analysis, I will summarize 3/4 of the news that impacted the market.
A quiet Christmas…
Unlike our stomachs, which were treated to a real feast, the 24th of december for Bitcoin was one of its least volatile Christmas Day. Indeed, we had seen in the previous analysis that we could expect — on average — a day with variations ranging from 4.25% to 12.5%. This year, Bitcoin was down -3.52% on Christmas Day. Surprising ?
No, because as mentioned a week ago a small drop was expected to fill the gap of the CME Bitcoin futures market:
“It is also worth noting that last weekend left a new gap in the CME Bitcoin futures market. As the price of Bitcoin is currently above it, I expect a drop in the coming days to at least close it. If you’re new to this and this last paragraph doesn’t mean anything to you, I invite you to read my article on this subject.”
For those who were able to take advantage of this opportunity to scalp, congratulations! But back to our weekly analysis.
What to expect?
There are several possible scenarios, including continuing to rise to the upper limit of the descending channel where Bitcoin has now been for the past 6 months. If its upper limit is not broken — at around $8500 — we would go down to the famous liquidity zone indicated on my chart by a light green rectangle: “Ideal Buy Zone”. In any case, and as I’ve been telling you for several weeks now, we’re still in a micro bear market. The necessary conditions to restart an uptrend are the following:
- Bullish cross on the weekly MACD…
- Fear and Greed Index very low
- Actual volume recovery
- Bounce on the weekly 200MA
In addition, there is the so-called “Golden Cross” on a weekly time frame, which took place at the beginning of December. Patience, then…
I would like to remind you that this is a strictly personal analysis, it is not a prediction but a trading plan. Don’t forget your stop-losses and adopt rigorous risk management. Only invest what you can afford to lose.
The chart of the week is this one: “200 Week Moving Average Heatmap” available on the LookIntoBitcoin website.
Notice how Bitcoin has been using this curve — in purple — as a support since… since 2012! (no data before). This is not a coincidence, it tells us one thing: the 200 MA is the key support of Bitcoin. Projected on the current chart, this future support curve should be in the $5300-$5700 range.
Hoping you enjoyed this analysis I wish you a very good New Year ahead!
See you in 2020 :)
News :
- China launching a Blockchain ETF ?: While the US are still being reluctant to approve any crypto related ETF, China is processing the launch of An index with 50 blockchain stocks. This was recently spotted by the Shenzhen Stock Exchange. If this is approved, it would become the first fully blockchain investment instrument publically available.
- Russian stablecoin ?: While speaking with a local news outlet : Interfax, Elvira Nabiullina revealed that the Bank of Russia has initiated the testing of stablecoins pegged to real estate under its regulatory sandbox program.
- Google has banned the Metamask from the Play Store: This is in line with Youtube, which has restricted the publication of videos related to crypto. Shortly after Youtube stated that this was not done on purpose and that it was a mistake…
- Congress to draft a new crypto bill: According to Forbes, U.S Lawmakers will soon introduce a new bill which provides a framework for regulating cryptocurrencies. The bill called “Crypto-Currency Act of 2020” will clarify which Federal agency is responsible for regulating digital assets. Moreover, the bill will classify various crypto classes such as stablecoin, synthentic stablecoin, crypto-commodity, etc.
Nico, analyst at 4C-trading.
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