AAX Intelligence: Bitcoin, Bancor & Cardano — AAX News & Insights
BTC recent movements
Over the past two weeks BTC has seen significant growth. BTC had increased over 22% in value and is currently sitting at $11760 USD.
This growth meant that BTC broke through the sideways trading period which had lasted for 89 days.
The sideways trading period saw BTC stuck between $10000 USD and $8650 USD, although as said earlier BTC broke out of this level.
From the $10000 USD breakout BTC then proceeded to rise unstoppably, before seeing resistance at $11800 USD.
As stated in the last report BTC would see heavy resistance at around $12000 USD from the Gann fan and the R4 Pivot Point (PP). The resistance level has been set with the black arrows indicating the times when $12000 USD acted as resistance, as demonstrated above.
Now that BTC has broken out of the sideways trading channel, and has reached the $12000 USD resistance level it bears the question. What could happen next for the world’s largest cryptocurrency?
BTC is currently seeing a bullish ascending triangle formation as demonstrated below.
As can be seen on the 3hr bullish triangle, the upwards support line has multiple points of verification. The ascending triangle appears bullish and is showing signs that there will likely be a positive breakout.
The first sign is that there was a previous upwards trend. This was the trend which took BTC all the way from $9000 USD towards $10200 USD, from here BTC then entered the triangle. In this triangle it is then clear that the rising support has increased power over the diminishing flat resistance. However it should be stated that in order to minimise the risk of being caught out, a confirmation seen with a breakout above the R1 pivot point is needed. This would then confirm that BTC will continue its positive movement. BTC also using the flat resistance as support would increase the likelihood of a sustained positive breakout. Alongside the flat resistance and the R1 support and the PPs BTC also has to break above the final Gann fan level (as shown below).
Set one SAR, BBW, BBs, PPs
As can be seen below the SAR currently has a bullish momentum. This is shown by the SAR being underneath the price candle. If BTC can maintain this bullish momentum and use it to break above the $12000 USD price barrier then we will see BTC break above the ascending triangle and travel further. However if BTC breaks negatively from the triangle then the SAR will flip and the momentum will switch from bullish to bearish. However as stated before, the SAR currently remains bullish and should help BTC propel itself above $12000 USD.
The Bollinger Bands (BBs) are currently showing that BTC is in a bullish stage. BTC is currently in the upper regions of the BBs and has seen the upper line act as resistance multiple times, as demonstrated below. As for the BBW, the rapid expansion of the indicator has shown that this was a substantial move — BTC volatility has increased. However the BBW indicator is sliding down, the value decreasing. This could suggest that BTC is about to approach another period of sideways trading / decreased price movement.
As for the PPs they are currently bullish. This is due to the price candles being above the centre P line. The PPs are suggesting that there will be resistance around $12300 USD, this is the R1 level.
Other Indicators PnF, Ichimoku, MACD/BBs, MACD, RSI
PnF — Bearish. Area has turned from green to red, however this could represent a period of consolidation due to the lack of downwards PnF movement.
Ichimoku — Bullish. Green cloud alongside price above the cloud.
MACD — Bullish. MACD is still in a positive crossover, however regarding positive price movement the slowing of momentum shown on the histogram is somewhat concerning.
MACD/BBs — Bullish. Green area, however the cloud is extremely small so is not a major bullish sign.
RSI — Bullish. RSI is in the very high demand area, showing a clear interest in BTC currently. The RSI is set at around 80.
BTC support and resistance levels
The first resistance level which BTC will meet is $12000 USD. This is a 2% gain from our current position. The $12000 USD resistance level is significant due to this being the level which BTC is required to break in order to move above the ascending triangle.
The second resistance level can be found at $12250 USD. This level is still within the resistance zone. BTC will majorly struggle to break above this, however if it does — there is very little to stop BTC from reaching the next resistance level. A move up to $12250 USD from our current position would be a healthy 4% gain.
The final resistance level is at $13500 USD. If BTC were to break above the other two resistances and move towards this level, it would be a huge 14.5% gain.
BTC support levels
If negative movement occurs the first retracement is at $11500 USD. This would be a 2% loss from our current position. Even if the bullish scenario plays out BTC could still see the $11500 USD support hit, this would occur due to BTC volatility.
The second support level which would be seen if $11500 USD was broken below would be $10900 USD. A move down towards $10900 USD would see BTC lose significant value — 7%.
The final support level is $10000 USD. A move to $10000 USD would see a 100% retracement from the start of this bullish move. The likelihood of this occurring is very low, however if it does occur a massive 14.5% of BTCs value would be lost.
BTC is currently at a pivotal stage. If BTC can maintain this bullish momentum and break positively above the ascending triangle then further positive movement is on the horizon. However if BTC breaks negatively below the triangle, then it appears that a retracement or sideways movement period will be in store.
Bancor Network Token (BNT)
BNT otherwise known as Bancor is a cryptocurrency which allows the easy exchange of compatible ERC-20 tokens. BNT aims to allow the trade of cryptocurrency away from the traditional BTC pair, alongside providing great liquidity with low costs for ERC-20 tokens. Through the way in which BNTs network works, there are only minute transaction costs when exchanging ERC-20 tokens.
BNT 2020 price action
BNT has seen an enormous explosion in price since the start of 2020. Since 01/01/2020 BNT has increased 1087% over 221 days. This saw the BNT price zoom from $0.2 USD towards $2.4 USD which BNT is currently at, as demonstrated below.
Although, how will BNT carry on to perform? Will it continue to see enormous gains? Or will BNT see a retracement?
Recently BNT broke out of a 63 day trading channel. This channel saw the start of some major moves for BNT, increasing from $0.2 USD all the way to $1.4 USD by the time BNT had broken out of the channel in a negative manner. The channel and negative breakout is demonstrated below.
From here it was expected that BNT would see a major retracement, this was due to the unbelievable size of the upwards move. However unexpectedly BNT found support at the $1.3 USD level. From there BNT had a major move increasing 92.5% from $1.3 USD towards $2.5 USD where BNT is currently at. This upwards move followed a trendline, as shown below with some of the black arrows.
Currently we can see BNT trading within $2.4 USD and $2.66 USD, with a potential ascending triangle appearing, although so far it is too early to confirm this. Currently there are no formations, while BNT has also separated from its trendline, however the trendline is still applicable and should provide upwards support for the cryptocurrency.
As has been demonstrated in the table above BNT is still extremely bullish. The amount of momentum which BNT is carrying is huge. However if BNT does not clear the R2 PP relatively quickly then certain indicators may begin to flip direction. This could swing the sentiment from bullish to bearish.
Price targets BNT
The first price target is at $3.15 USD, this would see a 26% gain from our current position. This could prove a touch block for BNT to break due to it acting as resistance numerous times in 2018.
The second price target is at $4.2 USD, a move here would be a huge 71% gain. To reach this level would see BNT hit almost ATHs.
Cardano is a POS cryptocurrency which allows developers to create decentralized systems and applications. ADA has multiple use cases from agriculture to finance, it is a truly exciting cryptocurrency. ADA also boasts of having one of the most environmentally sustainable blockchain protocols. Now let’s take a look at the price action of ADA since the start of 2020
ADA 2020 price action
Since the start of the year ADA has increased by 345%, all the way from around $0.03 USD to $0.144 USD which ADA is currently at.
The only way has been up since March for ADA. This upwards trajectory can be clearly seen with the dashed orange line. However as demonstrated below, the ADA volatility is increasing hugely with this move up. Volatility increase could be a slight cause for concern, so it bears the question.
After seeing the growth of ADA has exceeded many of those in the top 30 by market cap, will this growth continue?
ADA has recently seen multiple bullish formations. ADA is currently trading within an ascending triangle formation. The ascending triangle has multiple points of contact, increasing validation. Before the ascending triangle ADA saw a symmetrical triangle formation. This symmetrical triangle formation had a positive breakout and had a positive trend beforehand.
The overall formation is bullish. Seeing an ascending triangle formation after a symmetrical triangle formation (which had a positive breakout) is bullish. It is also bullish due to the huge upwards trend seen before the formations. If the symmetrical triangle is ignored (as demonstrated below), then the formation is still extremely bullish — providing that a positive breakout occurs.
Now we know that the formations are bullish, how about the indicators? Will they point in the same bullish direction?
Unlike the formations, the indicators are pointing towards a degree of uncertainty as to which direction ADA will move. With three bearish and three bullish indicators, they appear split. The direction of the breakout from the ascending triangle will therefore determine the future direction of ADA.
Bullish price targets:
The first bullish price target is $0.17 USD. If this was reached it would represent a 24% gain from our current position.
The second price target would be $0.22 USD. The likelihood of this occurring is low due to the $0.17 USD resistance level being very prominent. If this was reached it would represent a huge 57% gain from our current position.
Bearish price targets:
The first bearish price target is $0.11 USD. This could occur if there was a negative break of the ascending triangle and if the central PP was broken below. A move down to $0.11 USD would be a 17% loss from our current position.
The second bearish target is $0.09 USD. A move down here would be extremely unlikely, however it would be a 34% loss from our current position if this happened.
ADA is at a pivotal moment currently. If there is a positive breakout of the ascending triangle, the bearish indicators will likely flip and the bullish sentiment will remain. However if there is a negative breakout, this would see ADA break below the 20 day MA and possibly the centre PP. This would then point towards further bearish movement.
This intelligence report is for marketing and educational purposes only. The views, analyses and projections are based on the independent research, but cannot be taken as a form of investment advice.
Originally published at https://blog.aax.com on August 10, 2020.