Mon. Oct 26th, 2020
bitcoin

Crypto Recap: Bitcoin And Ethereum, New Highs, Ending Streaks

Bitcoin


Right before the week began, Bitcoin (BTC) finally smashed the $10,000 level on Sunday, extending to a high of $10,400 before closing $130 lower. It was the first time that the top crypto was at five-digit dollar values since Chinese President Xi Jinping's positive comments about blockchain back in October.

According to Coindesk contributor Joseph Young, three factors could have propped up Bitcoin's price lately: on-chain data of BTC/USDT is at its all-time high, BTC whales spoofing, and the confluence of technical and fundamental factors that show increasing on-chain activity.

However, Monday's trading wiped off Sunday's gains entirely as it printed a bearish candlestick that engulfed the bull move the day before. But that didn't come much of a surprise because Bitcoin had been trading higher for five consecutive days ere that, and it almost seemed like the market badly needed a pullback for new buyers to enter at a better spot.

The Accurate Indicator?

While that bear move was in play, some market observers and traders paid attention to a particularly accurate indicator for predicting Bitcoin's price, and its ominous signal on Monday was an impending drop. That indicator is the TD Sequential, which was developed by Tom Demark, the founder, and CEO of DeMark Analytics.

TD Sequential Indicator

TD Sequential Indicator (Source: TradingView)

Thomas Thorton of Hedge Fund Telemetry took to Twitter his firm's BTC trade recommendation, "#BITCOIN DeMark Sequential Countdown 13 today. We recommended selling the long last week with 50% gain from December buy signals."

The TD Sequential indicator signals a trader when to buy or sell based on whether nine consecutive candles close higher or lower than the previous four candles. Here's a more in-depth post about the TD Sequential.

And, as far as the accuracy goes, according to Demark, it was able to foretell the bear market in 2018, the slump from the high of 2019, and the reversal from December 2018.

Thomas Lee makes a bolder prediction

On Tuesday, Fundstrat's Thomas Lee upped his BTC price prediction to $40,000 when only last month it was just a move that would mimic that of 2019, which is a price acceleration of almost 100%. What convinced the firm's head of research to increase his bet when he appeared on CNBC last week is the coronavirus, and the price crossing above the 200-day moving average that he said will boost BTC's price to 190% in the next six months.

Breaking the streak

By Saturday, bears took control and sank BTC's price close to 4.5%. That selloff extended on early Sunday that pushed BTC to $9,612 before climbing back above $9,700 as of writing. And, Sunday ended up with a close lower than $10,168, breaking the two straight weeks since Feb. 10 that the king of cryptos traded in the green.

Ethereum


The second-most popular crypto by market cap followed Bitcoin's five-day rally that carried its price to $230 on Sunday (Feb. 10), but to some market observers, that wasn't the end of it as they eye more upside to Ether.

Ethereum, at that time, was also trading above the 50-day SMA and the 200-day SMA and passed a multi-year trendline drawn on a log chart that stretched from the highs of January 2018 to its present price. Traders believe that strong fundamentals also support ETH going higher, a projection of a further 60% surge.

FXStreet's price analysis sees the $220 support holding, and as long as it remains above the 100-day SMA, potential up moves are secured.

Bankin' on blockchain

Big news came to Ethereum on Tuesday when the largest bank in the U.S. JP Morgan announced that it would merge Quorom with Brooklyn-based blockchain software company ConsenSys. Quorom powers JP Morgan's Interbank Information Network or IIN, which serves more than 300 banks worldwide.

blockchain

The Ethereum variant facilitates information-sharing for payment verification, and it is what JP Morgan plans to use when they issue its own token, the JPMorgan Coin.

However, there's are no details for how the merger would affect IIN or the project running on the Quorom network, and a formal announcement of the deal would take place within the next six months.

Pushing Higher

Ether continued to trade higher on Wednesday as well as most of the other cryptocurrencies. The price reached a high of $278 before closing to $268. By Valentine's day, ETH printed a fourth consecutive green candle on the chart that was $13 shy of reaching $300.

The predictions of a parabolic rally could be unfolding as what most analysts predict where the altcoin is heading this month. That almost seemed accurate, but the candle immediately after that was in the same bandwagon as Bitcoin. The red candle on Saturday engulfed the one before it, warning of the bulls' waning momentum.

By early morning Monday, Ethereum is trading at $246 -- still way beyond the $220 support and at arm's length from the 100-day SMA. Nonetheless, the RSI crossed below an extreme overbought level at 80 and had already dipped below 70 as well.

Ethereum Chart Feb 17 2020

Ethereum Chart Feb 17 2020 (Source: TradingView)


We publish crypto recaps like this every week. If you want to get notified every time there's a new update, you can sign up below. You can also email Ron Mendoza at ronmendoza@intellinvestors.comEnter your text here...

Leave a Reply

Your email address will not be published. Required fields are marked *