Twitter Rolls out Bitcoin Tips, China Cracks Down on Crypto Again — Analysis, 27 Sep
Last week the cryptocurrency market started on a positive footing backed by positive news. For example, on September 23rd, Twitter announced it would integrate Bitcoin tips through the use of a Bitcoin address or Lightning Network-enabled wallet:
The crypto community welcomed the news, claiming that Twitter will facilitate the mass adoption of cryptocurrency and Bitcoin will become the native currency of the internet:
Another positive news was that just for the first month of accepting Bitcoin in El Salvador as legal tender, the adoption rate in the country reached 1.6 million citizens and surpassed the number of bank accounts:
However, in the second half of the week, the market sentiment changed. Reuters announced that China’s top regulators would ban crypto trading and mining:
China’s news dragged down the price of Bitcoin from €38,500 to €34,500 just within a couple of hours because the FUD spread across the cryptocurrency space almost immediately.
However, during the weekend, the market started to recover because the crypto community realized that the China FUD is not something new to the market:
Hashcash inventor Adam Back even underlined that news such as ‘China bans Bitcoin’ is a clear buy signal:
After a quite volatile week, the Monday market starts with a solid intra-day price rebound. According to Coin360.com, one Bitcoin costs €37,319.08 (+5.18%), one Ethereum — €2,640.58 (+11.03%), one DOGE — €0.1703 (+5.93%), and one UNI — €20.79 (+37.28%):
Now, let us analyze the price charts of the leading cryptocurrencies against the euro in the most noteworthy time frames.
BTC/EUR
In the weekly time frame (1W), BTC/EUR has formed two subsequent Bearish Engulfings:
According to the Technical Analysis theory, a Bearish Engulfing is a trend reversal pattern that occurs at the end of some upward price moves. That is why the bulls should be very cautious because the price of Bitcoin may continue to decline.
Nevertheless, the potential uptrend renewal remains in place according to the 4-hour chart (4H) — BTC/EUR continues to move within the Bullish Flag (common trend continuation pattern):
According to the chart, the price is currently approaching the support line formed by the previous local highs. In our view, if the price bounces off this line, BTC/EUR may exit the flag upwards, and the uptrend may resume. In this case, some more aggressive traders will open long positions.
ETH/EUR
In the daily chart (1D), ETH/EUR is testing the lower line (trend line) of the Ascending channel (uptrend):
In our view, if the price rebounds from the trend line, the uptrend may restart. In this case, a buy signal will appear. However, if the price drops below the trend line, the bearish pressure may intensify, and the uptrend will break. In this case, we will stay away from the market.
Moreover, we will also try to spot the buy signal in the 4-hour chart (4H). Right now, ETH/EUR is forming a Bullish Flag (typical trend continuation pattern):
If the price exits the flag upwards, an additional buy signal will appear in the 4-hour time frame. In this case, the opening of the long position will be less risky because there will be an alignment of the buy signal in the 4-hour time frame and the weekly time frame.
DOGE/EUR
In the weekly chart (1D), DOGE/EUR is drawing a sequence of mainly bearish candlesticks with descending local highs and descending local lows:
This sequence of bearish candlesticks is a clear signal that the bears are controlling the market. We would like to see at least one solid bullish candlestick in the weekly chart (1W) to start considering opening a long position.
Also, in the 4-hour chart (4H), DOGE/EUR continues to slide within the Descending channel (downtrend):
As long as the price of Dogecoin remains in the Descending channel, we prefer to abstain from opening long positions and will stay in a ‘wait-and-see’ mode.
UNI/EUR
In the weekly chart (1W), UNI/EUR has formed a Dragonfly Doji this past week:
The Technical Analysis theory says that a Dragonfly Doji after a price decline signals a potential price increase. That is why it is highly probable that a price rebound of DOGE/EUR is just around the corner.
Interestingly, the 4-hour chart supports a potential rebound as well. Right now, the price is consolidating at the neckline of the Double Bottom (common trend reversal pattern):
Theoretically, the price may receive enough support from the neckline to rebound. Nevertheless, we will open a small long position only if UNI/EUR exits the Descending channel (downtrend) in the 1-hour chart:
As long as the price stays within the channel, we will stay away from the market.
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The analysis is purely informational and does not constitute investment, financial, trading, or any other sort of advice and you should not treat any of Bitvalex’s content as such. Bitvalex does not recommend that any cryptocurrency should be bought, sold, or held by you. You are solely responsible to conduct your own due diligence and consult an advisor before making any investment decisions.
Originally published at https://bitvalex.com.
