Brandt’s Momentum Indicator Highlights Potential Bitcoin Reversal

Bitcoin
August 16, 2019
9
Bitcoin’s stock valuation has already made some stunning strikes in 2019, outperforming each the NASDAQ Composite and S&P 500 (on a YTD foundation) by a large margin.  Nevertheless, an lack of ability to carry assist at key technical areas would counsel this yr’s bull pattern hasn’t but been validated. Bitcoin’s Line within the Sand Because
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Bitcoin’s stock valuation has already made some stunning strikes in 2019, outperforming each the NASDAQ Composite and S&P 500 (on a YTD foundation) by a large margin.  Nevertheless, an lack of ability to carry assist at key technical areas would counsel this yr’s bull pattern hasn’t but been validated.


Bitcoin’s Line within the Sand

Because the starting of the yr, BTC/USD has generated good points of 172%, outpacing the returns of each the NASDAQ Composite (at +16.6%) and the S&P 500 (at +13.2%) over the identical interval.  

Nevertheless, technical indicators counsel crypto buyers may take into account taking good points on parts of their positions if bitcoin pattern reversals start to unfold.  A latest tweet from Peter Brandt highlighted the bullish nature of this yr’s bitcoin motion, citing momentum readings which positioned the rally inside the context of worth strikes seen from 2015-2017:

Brandt’s pattern mannequin locations a digital “line within the sand” slightly below psychological ranges at $9,000, which has labored beforehand as a support-turned-resistance degree that propelled BTC costs into five-digit territory: 

BTC/USD – TradingView.com

Extra importantly, the most recent declines have despatched costs via the 50-day exponential transferring common (EMA), which is a metric that tends to be watched extra intently by the stock’s daytraders.  As we are able to see, that is the third time BTC/USD has fallen via the 50-day EMA since March of this yr. The decrease highs posted through the June 28th – August sixth rally counsel a near-term high might have shaped in BTC/USD.  

In the end, this short-term bearish momentum might power a take a look at of Brandt’s vital worth ranges.  The quickly ascending 200-day EMA has the potential to work as an moreover supportive issue for BTC lengthy positions.  Nevertheless, markets would doubtless must see a interval of consolidation with the intention to worth/time metrics to align in ways in which hold valuations elevated above the $9,000 degree.

Potental for Volatility

Given bitcoin’s latest transfer to shut at its highest weekly candle in over a yr, any draw back breaks might have the potential to take many crypto merchants abruptly.  Turbulence in each bond markets and government-issued currency currencies has created summer season volatility ranges which might be far exterior of the historic averages.

Choices merchants are at the moment betting that much more volatility is prone to flood the stock, so it is probably not a major shock to see related expectations begin to creep into the value motion of bitcoin and different cryptos within the near-term.

The place do you count on BTC/USD valuations to journey subsequent?  Add your ideas within the feedback under!


Photos through Shutterstock, Twitter @PeterLBrandt, BTC/USD charts by Tradingview

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