OKEx Technical Weekly: Jan 6, 2020
Technical analysis of this week’s crypto trading market
The cryptocurrency space has a mixed start in the first Monday trading in 2020, with the prices of bitcoin slightly dipped into the red, while major altcoins were mostly in the green. We expect the rising geopolitical tensions will continue to be one of the major themes in the global markets, that could accelerate the risk-off sentiment in the global equities markets. Investors could refocus on bitcoin’s digital gold character in the short-term, as safe-haven demand could continue to increase due to geopolitical events.
We wanted to highlight the OKEx BTC Long/Short Ratio, which retreated from a recent high of 1.28 to 1.06 on Asia Monday. A decrease in the ratio could mean the short-term downside pressure has been reduced. However, we’ve yet to evidence a significant increase in upside momentum.
While halving remains the primary focus in the medium-term perceptive, data suggests that individual investors and institutional investors have been holding some very different views on bitcoin’s medium-term outlook.
Sentix Strategic Bias, one of the indexes that gauge medium-term market sentiment, shows a massive spread between the two investor segments. With individual investors being positive on bitcoin, while institutional being extremely pessimistic.
Patrick Hussy, Managing Director at Sentix, believes that “private investors had the better nose and prices subsequently moved upwards.” He added that institutional investors could have a lot to revise when the prices of BTC increase.
- BTCUSDT has continued its journey to reclaim the July-December trendline resistance levels (orange line)
- Momentum appears to be healthy. Both the RSI and the UO have produced some higher lows on a daily chart, and it looks like the momentum could go a little further, although the room may be limited.
- The pair have been getting closer to the upper Bollinger Band, suggesting a short-term correction could be possible, and the 20-SMA at around 7250 seems decent support. The Bollinger Band squeeze remains another focus.
- A bearish divergent in trade volume also suggests a price correction could be possible.
- While it’s too early to call any reversal at this moment, further upside could be seen if the pair were able to stay above the trendline resistance and turn it into support.
- BCH outperformed BTC during the Monday Asia session, gained more than 5% against the dollar.
- The pair have been getting closer to its June-December 4-hour trendline resistance. However, the RSI and the price has produced a bearish divergence, suggesting the rally could be running out of steam.
- While a short-term correction could be feasible, the 50-MA seems decent support, which located near 206.
- ETC has been one of the top performers in the altcoin space in recent weeks. While BTC and significant altcoins have mainly been trading below their 50-day moving averages, ETC has already way above its 50-MA and has made a clearer rebound since reaching the lows in December.
- The pair has been testing the 23.6% Fibonacci retracement; again, it’s one of the few significant cryptos that able to reach such levels since reaching the low in December.
- While a short-term correction should not be ruled out, the previous high of 5.38 could be the next level to watch.
- ATOM has been one of the laggers in the Monday session. It traded more than 4% lower against USDT.
- The rally could be running out of steam here. The 9-day RSI failed to produce some higher highs, and apparently, it broke the recent trendline support. Besides, it also showed a bearish divergence.
- The first key level could be the 50-day moving average, which is near the 3.9 area. The trendline support at around 3.7 could be the next key level.
Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involves significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.
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