Today’s analysis begins with the same levels as in our previous review. The volatility during the business week was very low – just under $100.On January 29, the bears managed to reach their all-year low of $3,422 (only $22 less than our target price).It is noteworthy that this all-year low was not followed by a sharp upward spike.The moving averages are above the price and still indicate a continued downward trend. The MACD indicator is in the sell zone. At the moment of writing, the BTC/USD price is $3,480 – very close to the previous support level of $3,460. With a downward trend, the next support level will be the all-year low of $3,420.
On the 4-hour timeframe we see the price moving in a descending channel.The moving averages are above the price and looking downwards. The EMA50 at $3,550 acts as a local resistance in the ascending movement. The MACD indicator is in the sell zone. Given the end of the week and the beginning of the month, the all-year low may be reached and re-tested in the next few days.
The double bottom theory
On the day timeframe we see a possible formation of a “double bottom” pattern which implies a price drop to the last-year low and further down. This is a reversal figure, but the classic development of this pattern is unlikely to work out.
Last December, we were could notice that even such strong technical analysis figures on sufficiently strong timeframes do not always work out. That’s why we shouldn’t pin great hopes on this theory.
Let’s have a look at the 1-day timeframe
Technically speaking, everything on the day chart indicates a continued downward movement. The moving averages are above the price, and the MACD indicator is in the negative zone.
Now, let’s take a look at the fundamental factors that could have affected the market this week.
NEM – is it a scam?
It was reported yesterday that the Nem Foundation was on the verge of bankruptcy. The company was forced to downsize and intensely ask for donations.
A lot of people have treated the news as the end of the cryptocurrency. However, many have overlooked the fact that Nem Foundation is not the developer of Nem and Catapult blockchain. This non-profit organisation doesn’t seek profits but aims to raise visibility of the XEM project.
In fact, the NEM Foundation is a charitable foundation that collects donations and spends them to pay salaries. The NEM coin and blockchain, however, are widely used: for example, you can pay with this cryptocurrency in the Chinese messenger WeChat. So, the Nem Foundation closure will not lead to the collapse of the project.
Will Bitcoin ETF from VanEck and SolidX come into being?
The Chicago Board Options Exchange (CBOE) has re- applied with the US SEC for a change in the effective regulations to enable a launch of Bitcoin ETF from VanEck and SolidX.
— Gabor Gurbacs (@gaborgurbacs) January 31, 2019
The previous application of 22 June 2018 was withdrawn due to the U.S. government’s shutdown. Ian Van Eyck, VanEck’s CEO, believes that the refusal could have been made automatically, so a decision was taken to re-file the application.
Once the application is submitted, the U.S. financial regulator will have 240 days to review it. Earlier, the NYSE Arca exchange has sent its proposal to launch Bitcoin ETF from Biwise Asset Management.
Fidelity will launch a custodial service
Fidelity, a U.S. financial services holding company, has announced the launch of Bitcoin custodial service in March. The Company blog reports that the service’s tests are now at their final stage. The venue to be called Fidelity Digital Assets will focus on cryptocurrencies cold storage for institutional clients. The platform will support Bitcoin and several other liquid cryptocurrencies.
The platform’s launch may become a key event for the crypto market, as it will address the cryptocurrencies storage issue that remains unresolved as of today.
This week’s results in the crypto market.
The whole week hasn’t lead to any specifics in the market. Trading remains sluggish and volatility is low. We still do not see any entry points for an ascent and the pending orders have not brought any significant profit yet.
We should also keep in mind that the weekend and the beginning of the new month are factors contributing to a decline.
As you can see, the review frequency is not a guarantee of profit; we don’t make any unnecessary moves and do not recommend you to get nervous without a valid reason. We say goodbye till Monday.
We wish you earnings and an excellent weekend.