Following yesterday’s brutal sell-off, it looks like we’re getting a bit of a bouncy-bounce in early trading today.
The Asian and European markets are up, but the real test on whether this relief rally holds legs will come during the U.S. session.
No doubt there will be many bulls who have been on the sidelines, watching the recent face-melting rally since March and kicking themselves for not taking part, who will see this latest pullback as an opportunity to get in. On the other hand, a 6% drop for both stocks and bitcoin is a clear sign that volatility isn’t quite dead just yet.
Today is Friday, and that means the weekend is coming up. For most traders and investors, that means there are precious few hours to decide exactly what side of the line in the sand they choose to stand on before the decision is locked in for 48 whole hours by the closing bell of the New York Stock Exchange.
Economic data is in from the U.K. today, and all of it is worse than expected. Here’s one sensational headline from The Guardian this morning.
GDP is the one economic indicator making headlines of course, but manufacturing and industrial production figures were nearly twice as bad as economists were anticipating, and construction output was squashed by a walloping 40%.
All this is kind of baked into the pie though. When seen in the context of a coronavirus lockdown, it should be understood that these numbers are going to be brutal.
Remember, investing in stocks isn’t really about what’s going to happen next month so much as it’s about understanding what’s likely to happen in the next few years. This is a difficult task given everything that’s been going on lately.
The big question is when will things get back to normal? Or, how long will it take for the economy to return to the strength it was at in February?
Optimists might think that a complete recovery may be possible some time next year while pessimistic views vary. Some predictions span out as far as a decade or more.
Personally, I believe there’s even a possibility, though not a very likely one, that we never return to that time. For better or worse, COVID-19 may have altered the course of humanity for centuries to come.
Of course, as with most truths, reality will likely play out somewhere between the optimistic and the pessimistic views. Also, it will likely be different in different places. In New York, they’re clearly easing restrictions, while Houston, Texas is now considering reimposing lockdown measures.
So now, see if you can decide within the next few hours how you want to position yourself for that. Now, hopefully we can understand some of the volatility that’s happening. Here we can see the VIX volatility index, with yesterday’s spike clearly visible even in this long-term data.
My shorts on the stock market are still in play, and I’ve reduced my exposure to the crypto market for the time being, at least until we get some better indication of where this is going.
For your entertainment this weekend, I’d like to broach a subject of great social and political import that has been coming up a lot lately. Even though I’ve received a lot of flak on social media, I will not be silenced, because the topic is freedom of speech.
Although I don’t often find myself holding the same view as Facebook founder Mark Zuckerberg, in this case, I believe that he’s in the right….
Zuck himself has been under tremendous pressure for not censoring posts from President Donald Trump. Now, we won’t go into what Trump was saying, it clearly wasn’t very nice. Twitter did take the option to censor the same speech, which I believe is the wrong decision.
Free speech is simply not free if it is censored.
Rather than explain to you why, I will simply show you two Ted Talks that prove this point. Each from a completely opposite point of view but come to the same conclusion. So….
If you tend to lean liberal or vote Democrat, watch this video now.
If you’re more conservative or support Republicans, watch this video.
After watching either of these videos, or both, I hope that you can come to the same conclusion I have. Indeed, it may give a bit of insight into how I like to do all my analytical thinking.
The post Stocks Recover While Bitcoin Remains Weak Going Into Weekend appeared first on Bitcoin Market Journal.
Bitcoin Increases But Struggles to Sustain Prices Above $13,000
On Oct 23, Bitcoin (BTC) continued the upward move which had accelerated on Oct 19. While the long-term trend is likely bullish, a short-term drop could occur before the price resumes its upward movement. Bitcoin Continues Ascent On Oct 23, Bitcoin continued its upward movement by creating another bullish candlestick that was slightly smaller than […]
The post Bitcoin Increases But Struggles to Sustain Prices Above $13,000 appeared first on BeInCrypto.
On Oct 23, Bitcoin (BTC) continued the upward move which had accelerated on Oct 19.
While the long-term trend is likely bullish, a short-term drop could occur before the price resumes its upward movement.
Bitcoin Continues Ascent
On Oct 23, Bitcoin continued its upward movement by creating another bullish candlestick that was slightly smaller than the candle that preceding it. Furthermore, yesterday’s wick-high of $13,208 was lower than that of Oct 22, which reached $13,235.
Despite this development, there is no visible weakness in the daily time-frame. The MACD, RSI, and Stochastic oscillator are increasing and there is no bearish divergence present.
The short-term chart for BTC does show some signs of weakness, however. On Oct 21, BTC created a shooting star candlestick (blue arrow in the image below), which was the first bearish sign during the upward move.
Yesterday, the increase that failed to reach the previous high was combined with significant bearish divergence in both the RSI and the MACD, the latter of which has almost crossed into negative.
The Oct 21 high might have marked the top of the third sub-wave (shown in blue below), which is a part of a larger third wave (orange).
Considering the short-term bearish implications from the previous section, a retracement is expected. Even though there are no clear support levels below the current price, we can use Fib retracement levels to determine where the retracement will most likely end.
The price could drop to the 0.382 Fib level of sub-wave 3 at $12,125. The reason for this shallow retracement is a counter to the deep retracement of sub-wave 2, which went all the way down below the 0.618 Fib level. Because of the concept of alternation, we would expect to see the opposite in sub-wave 4.
To conclude, while it is likely that BTC is bullish in the longer-term and will move higher, a short-term retracement is expected before the price resumes its upward movement.
For BeInCrypto’s previous Bitcoin analysis, click here!
Disclaimer: Cryptocurrency trading carries a high level of risk and may not be suitable for all investors. The views expressed in this article do not reflect those of BeInCrypto.
The Best Place to Short Bitcoin is Above $14K, Analyst Explains Why
Bitcoin bulls will enjoy domination over the market until its price breaches the $14,000-mark, according to Eugene Loza of EXCAVO.
The independent market analyst wrote in his note to investors that he expects to see traders with more exposure in Long trades than the Short ones. He signified his prediction with a technical structure. It envisioned BTC/USD inside an Ascending Channel pattern, inching upward as it awaits to test a sequence of Fibonacci resistance and support levels.
The smaller Fibonacci retracement graph in the chart above expired at $12,283 after Bitcoin breached the level on Wednesday. Simultaneously, the cryptocurrency closed in towards the 61.8% level – at $13,037 – of the bigger Fib setup, awaiting a breakout move to the upside.
An $11K Bitcoin Possible
Mr. Loza supported the outlook of an extended bullish move, noting that $13,037 is “not the best place for a short [position].” He added that those who are still trading against Bitcoin’s upside outlook would risk getting liquidated at around $13,350 at a loss.
That would leave Bitcoin with the possibilities of moving further higher towards the 78.6% level of the big Fib. That is around $15,728.
Mr. Loza said that opening a short position anywhere between $14,000 and $15,728 is a “better” call. The range also lies near the upper trendline of the Ascending Channel pattern.
“Once we take the target, there is a possibility of correction to the middle line of the ascending channel,” Mr. Loza added.
The mid-level is below $11,000.
More Downside Outlooks
Mr. Loza’s statements came amid a period of strong buying enthusiasm for Bitcoin. The cryptocurrency this week gained global recognition after PayPal, the world’s leading payments service company, announced to integrate it in its existing line of products.
Before PayPal, its top rival Square, a firm headed by Twitter CEO Jack Dorsey, had shown $50 million worth of BTC in its balance sheets. Another recognized corporation, MicroStrategy, also reallocated $425 million of its cash reserve to Bitcoin, citing its fears of US dollar devaluation amid rising M2 and ultralow interest rates.
Traders assessed the sequence of events as validation of Bitcoin’s growth among prominent firms, both as a service and a financial asset. As a result, the Long positions on BTC/USD jumped dramatically higher than the Short ones, validating that the majority believes Bitcoin is underpriced at current rates.
Michaël van de Poppe, another independent market analyst, showed caution towards overly bullish statements. He said Bitcoin should hold the $12,750-12,800 range to sustain its upside bias. Otherwise, the cryptocurrency risks plunging “towards $12,200 and potentially $11,900.”
Mr. Poppe’s medium-term outlook, at the same time, projected an upside continuation towards $14,000. He nevertheless reiterated that “the area between $11,200-11,700” would serve as support.
“In the worst-case scenario around $10,000, but everything is clear and good here,” he added. “Breaking $13,600 area and I think $16,000 is next.”
That somewhat rhymed with Mr. Loza’s prediction of the cryptocurrency.
XRP Bulls Step in With a 5% Daily Increase, Is $0.30 Next? (Ripple Price Analysis)
XRP/USD – Buyers Finally Break Above Symmetrical Triangle
Key Support Levels: $0.26, $0.251, $0.245.
Key Resistance Levels: $0.261, $0.271, $0.279.
XRP went through a rollercoaster of price action yesterday as it reached as high as $0.271 (bearish .618 Fib) and as low as $0.228 (.618 Fib) during the 24 hours.
The cryptocurrency had been trading within a symmetrical triangle and rebounded from the lower boundary at the start of the week. Despite the whipsaw like movement yesterday, the daily candle still closed beneath the triangle’s upper boundary.
Today, XRP pushed higher to break toward the upside of this triangle. It reached the resistance at $0.261, provided by a bearish .5 Fib Retracement level.
XRP-USD Short Term Price Prediction
Moving forward, if the buyers can break the current $0.261 level, higher resistance lies at $0.271 (bearish .618 Fib Retracement). Following this, resistance lies at $0.279 (1.414 Fib Extension), $0.286 (bearish .786 Fib), $0.295 (bearish .886 Fib), and $0.3.
On the other side, the first level of support lies at $0.26. Beneath this, support is expected at $0.251, $0.245 (100-days EMA), and $0.237 (200-days EMA).
The Stochastic RSI produced a bullish crossover signal, which helped the recent push higher.
XRP/BTC – XRP Briefly Penetrates Beneath 2000 SAT.
Key Support Levels: 2000 SAT, 1960 SAT, 1915 SAT.
Key Resistance Levels: 2050 SAT, 2127 SAT, 2200 SAT.
XRP has been struggling throughout the entire month of October against Bitcoin. Yesterday, the coin fell from 2050 SAT and broke beneath 2000 SAT. It continued to spike as low as 1915 SAT where it found support at a downside 1.618 Fib Extension.
The coin managed to close the daily candle at the 1960 SAT level (downside 1.272 Fib Extension) and it has rebounded back above 2000 SAT today as it trades at 2015 SAT.
XRP-BTC Short Term Price Prediction
Looking ahead, if the buyers continue higher, the first level of resistance lies 2050 SAT. Above this, resistance lies at 2127 SAT (bearish .236 Fib), 2200 SAT, and 2260 SAT (bearish .372 Fib & 100-days EMA).
On the other side, if the sellers break back beneath 2000 SAT, support lies at 1960 SAT, 1915 SAT, and 1900 SAT.
The Stochastic RSI is in extremely oversold territory as we wait for a bullish crossover signal to send the market higher.
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