The market situation once again confirms that he, who has patience will always reap profits! If you followed the advice given in our previous reviews, you can be congratulated on making profits. We apologize for the interruption in our reviews and cannot wait to share with you what happened in the market during our absence.
It should be noted that the price is moving in the channel with $3,420 support level and resistance at $3,800 level. These levels have long been marked on the chart as a recommendation to buy with a decrease to $3,400 levels.
What does technical analysis say?
The buy signal formed by EMA50 crossing EMA100 bottom-up is still maintained, but its strength is reducing. As of this writing, the price is squeezed between EMA5 moving averages at $3,682. EMA50 provides local resistance, while EMA100 at $3,625 acts as local support. Signs of reversal are shown by MACD indicator located in the selling area. The indicators were likely to “unload” and cool down after their upward momentum, as there was no significant rollback, and the price was well supported by purchases while declining to $3,625. For continued growth, the price needs to overcome the resistance at $3,800.
On February 10, moving averages formed a buy signal (with ЕМА50 crossing ЕМА100 bottom-up). At the moment, the signal is maintained despite its substantial decrease in strength. MACD indicator is in the buying area, but it is tending downwards, therefore, you should be careful.
It is important to highlight the nature of the momentum: the price tried to touch $3,800 resistance level, but no retesting followed. The growth attempt was harshly terminated at $3,750. Local support is at $3,645 and, for now, it is holding back the decline from testing the next support levels of $3,613 and $3,580 (ЕМА50 and ЕМА100 respectively).
On the daily timeframe, the situation differs from the previous ones. Moving averages run above the price maintaining the downward movement, whereas EMA50 at $3,766 offers resistance preventing the price from rising higher. The price has broken through the sloping line and got stuck on $3,800 resistance level, while fully maintaining the strength of the momentum the same way it happened on previous occasions when it broke through the sloping line. If the price maintains and repeats the movement momentum by continuing to move strictly within the channel, a likely decline to $3,300 should be expected. The risks of such a scenario are persisting.
The charts analysis shows that, globally, the situation is to a greater extent tending downwards. However, fundamental analysts have found a few grounds for optimism. Specifically, experts see a growth signal in Bitcoin hashrate reaching 50 EH/s (being its three-months high). It indicates that new miners have been joining the network. Researchers from SFOX crypto startup have also identified several factors indicating growth.
Sentiments to change to “mildly bullish”
Based on the analysis of factors such as volatility, market participants’ sentiments and industry development, the company’s analysts calculated the SFOX Multi-factor Market Index.
The analysts’ confidence is attributable to the fact that the blockchain technology has been gaining wider use. There is also a growing interest in cryptocurrencies among institutional investors.
Moreover, in January, the number of transactions in the Bitcoin network increased to 300 thousand reaching its November 2017 level. It was the highest number of transactions over the past year. Commission fees are nowhere near the crazy price levels we saw at the end of 2017 either.
Another reason for optimism was provided by Huobi cryptocurrency exchange’s financial report for the past year. Despite the market decline, stock exchange’s activity has doubled forcing it to increase its staff.
The market has not reversed yet. We hope that all our readers have been making profits. However, despite the positive factors, the risks of decline should not be ignored.
Be patient, dear friends! Wishing you an excellent week and profits with our blog!