Table of Contents
- Market Commentary
- Top-20 Cryptocurrencies
- Week Highlights
- Bitcoin Market Overview & Forecast
- Altcoin of the Week
- Altcoins Forecast & Trade Ideas
- Technical Analysis Explained – Ichimoku Cloud Indicator
- Around the Web
Bitcoin Correction • South Korea Regulations • Venezuelan “Petro” • JP Morgan • Ripple
“Past sell-offs were followed by rallies of ~150% within 84 days,” Lee said. “In other words, we think the risk/reward at these levels warrants adding here, even if there is additional downside.”
South Korea Regulations
In order to mine it, people will have to be registered with Venezuela’s Registry of Cryptocurrency Miners. This agency was created in order to track people mining bitcoin as Venezuelans started to use the digital currency in an effort to hedge themselves against inflationas well as to purchase food and other items online. All operations related to Petro will be under the jurisdiction of the country’s Superintendency of Cryptocurrencies and Related Assets.
Bitcoin Market Overview & Forecast
Bitcoin is slightly recovering after another great fall during mid-week, but latest action indicates that it is struggling and it may drop once again, henceforth establishing that we are in a firm bear grip. With all the recent news and panic buttons being triggered, future remains uncertain, but we are still hopeful of a long-term bullish trend resume, once this battle is finished.
This past week, bitcoin price fell from $11,800 and reached the $8,000 threshold, having actually been traded below that level. It was one of the scenarios that we anticipated in the previous edition of this weekly report: if the psychological barrier at $10,000 was broken by the bears, then we expected to see some intensified selling, which could bring the price, in a worst-case scenario, to the $8,000 level. One week has passed, and that scenario prevailed.
As we write this report, bitcoin is, in its US Dollar pairing, trading near the $8,500 mark in a localized downward trend that has been established since the slight recovery from this year-bottom, up to almost $9,500. In a four-hour time frame, a resistance line at the $9,400 mark has already been settled; it looks to be the first goal to reach if we intend to see a reversal in trend from later days behavior. And on a daily time frame, the first rally point at $10,400, already seems far distant and not so quickly achievable.
However, the very-short-term panorama points for another test at the $8,000 support line, which is currently being reinforced by a 200-SMA, in a daily time frame. Last Thursday, we watched an impressive response to the first test on that level, with an abnormal volume been pulled by bulls in response to the apparent sold-out. In the eventuality that bulls win this struggle happening slightly above the $8,000 support, rallies are expected to be short-lived events, rather than sustaining moves higher.
Bitcoin market is incredibly volatile and short-term scenario is currently pretty hard to forecast. As a curiosity, the following figure depicts its trading volatility in a daily comparison with gold or S&P 500 index:
We remain bullish on the long-term setup but the news of increased regulations, hacking, crackdown by various governments, bubbles bursting or orchestrated dumps – which are frequently highlighted in mainstream media – constrains us from doing more plausible trading scenarios in short-term frames. Psychology is a decisive factor while forecasting, and, in an almost settled panic environment, we prudently advise extreme caution while waiting for long-term buying opportunities.
Prices are likely to continue under pressure, and if this leg we’re currently watching confirm a bottom in the bitcoin price, and if it breaks the recent lows below $8,000, it’s plausible that the fall could extend to $6,000 or $5,000 levels. Our final strong support level now sits around the $4,000. Long-term traders should wait a couple of days before entering the market, hopefully with RSI in oversold levels and with a more positive attitude from traders and investors towards the bitcoin ecosphere.
Bitcoin Technical Analysis & Trade Ideas
This week, we remain on the daily chart for the BTC/USD pair prices, for a more proper view on determining the general market direction. Short-term indicators are essentially bearish, so we stay in this time frame to plan ahead our entry zones.
During almost all week, we’ve been watching a succession of red candles being formed day after day. Because of that, the triangle pattern has been broken to the downside. A dynamic price resistance has, in the meanwhile, establishing itself in $10,310 mark, and the price is closing in, from above, into the 200-SMA which still remains bullish and will act as support in upcoming days – along with the 0.618 retracement from ATH to September low. Ichimoku cloud remains bullish above and ahead of the market but is quickly narrowing and in the imminence of turning bearish if price action continues the downward trend. With all the averages stacking above to the downside and accelerating on a daily basis, we don’t prospect a quick reversal and a steady rally reversing the trend, unless the bulls start to struggle more vehemently in this support region.
Switching to momentum and volume, we see RSI almost entering oversold territory, after a small spike in response to the first test at the $8,000 level. Willy and Stochastic also wiggle a bit slightly above our threshold for oversold levels, while MACD is still below its zero-line. Our Laguerre indicator continues to flash green signals and volume had a huge spike, setting up current year’s maximum. Having said the all picture in words, our opinion points to some instability and uncertainty in upcoming days, but we keep bullish in the long term and still looking for some more obvious entry points.
Trade ideas – Market entry/exit values.
- Bitcoin Very Short Term (hours-days
- No recommendations until further notice.
- Bitcoin Short Term (days-weeks)
- [EXITED] We entered this trade on 8,000 $ with a stop on the 7,500$ and a target of 9,500$. We were stopped out of the LONG position off of the 7950$ level at 7525$ for -4.09%.
- We will consider a SHORT position on a retracement back up to the 9500 $ – 10,000 $ area with a stop around 10,500 $ and a target of 7,500 $.
- Bitcoin Medium Term (weeks-months)
We will consider a LONG position on a selloff down to the 6000 – 6500 $ area with a stop around 5846 $ and a target of 9,500 $. r/r 19:1[ACTIVE] We have activated a LONG position off of the 6100$ level and a target of 9,500 $.
- Bitcoin Long Term (years)
- We will consider a LONG position on a correction down to the 3000 – 4000 $ area with a stop around 2975 $ and a target of 22,600 $. r/r 18:1
Altcoin of the Week
We continue our tour around some major altcoins and this week we have picked up Litecoin (LTC) to make its debut on this technical section. Litecoin is a peer-to-peer cryptocurrency inspired by – and in some technical details is almost identical to – bitcoin.
LTC doesn’t escape the major trend of its main currency but what flashed our attention was the impressive rally it made since Friday, from the bottom wick almost touching the $100.00 barrier to a Saturday close near the $160.00 level. At the moment of this writing, LTC is being traded slightly above the $140.00 mark, correcting low as all other major cryptocurrencies.
As with bitcoin, we’re slightly bullish in the long-term for this asset, not only because of the upward 200-SMA providing support for the current price action, but also for the $100.00 mark which sets up a psychological pivot level. Our main support and long-entry zone lie around the $85.00 price level if bears try to test that former barrier.
Looking up at the daily timeframe for the Litecoin-USD prices, we see a dynamic resistance being built around the $175.00 mark, with prices decelatering their downward trend, and approaching the bearish trend line. Having crossed the 100-SMA to the downside earlier this week, and testing the 200-SMA on Friday, prices are now slightly recovering with an huge volatility between those averages. Ichimoku cloud remains bearish above and ahead of the market, and main oscillators are still above oversold territory, perhaps waiting for some consolidation from the main market. A fall in prices and another test on the $100.00 mark will potentially place them in oversold territory, reinforcing the flashing signals being flagged from daily Laguerre-PPO for quite some time now. And volume profile looks pretty healthy this weekend which shows that their rally performance hasn’t escaped the eyes of main investors.
Overall, while we’ll look for some consolidation, and wait a bit to see what happens to bitcoin, we will keep Litecoin performance under scrutiny, with a potentially entry in a long-term setup if prices fall below the hundred dollar mark.
Altcoins Forecast & Trade Ideas
Go long on blue/green zones (buy) / Go short on red/orange/yellow zones (sell). Blue dots are dynamic support zones, with high probably of an bear inversion. Red and purple dots are dynamic resistance zones, with a high probability of a bull inversion or pullback. The technical indicators section is based on the 1W (one week) timeframe, plotted with Tradingview data. Most of the technical indicators reflect a momentum representation and not a broader contextual overview of the market.
Technical Analysis Explained – Ichimoku Cloud Indicator
Every week, our top analyst explains what to expect of some key market indicators. This will help you to better follow some of our recommendations.
Click here to learn more
Why we like it
We see the Ichimoku Cloud as a more powerful and complete version of MAs (Moving Averages) or EMAs (Exponential Moving Averages). While (E)MAs also show MA crosses and indicate possible areas of support and resistance, Cloud does a lot more. It shows more areas of support and resistance (Senkou Span A & and Senkou Span B), it can show targets for long/short positions in the case of an edge-to-edge trade (flat Kumo or just opposite edge of the Kumo Cloud), it gives breakout areas (Kumo breakout points), it can help you determine how much conviction to have in a position (TK cross relative to Cloud), and more. In short, it is like using (E)MAs on steroids.
How we use it
The first thing I do is adjust the inputs on the Ichimoku Cloud to 20/60/120/30 to better reflect the fact that cryptocurrency markets operate 24/7 (see below). If we’re looking at an altcoin which doesn’t have enough price history for the Ichimoku Cloud to work properly, I will reduce the settings to 10/30/60/30.
We use the Ichimoku Cloud in two main ways.
- To see the direction of the macro trend. This is done by looking at price in relation to the Kumo Cloud on a high time frame like the 1D. At a glance, I can tell where the current trend is, how strong it is, and when it started/the last one reversed.
- To find confluence with areas of support and resistance that I already have on my chart. This is the most common way in which I use the Ichimoku Cloud. Namely, I will draw my lines/levels of support and resistance first, and then overlay the Ichimoku Cloud to see if any of my lines have confluence with the indicator e.g. a support line which lines up with the Kijun line will make me more confident about that support level holding, and the same applies if I were to have a resistance line which lines up with the top boundary of the Kumo Cloud i.e. the bullish Kumo breakout point.
Around the Web
So much cool stuff coming to #bitcoin including:
– MAST– Confidential Transactions– Signature Aggregation– Scriptless Scripts– Simplicity– Covenants– Taproot+ Much much more
Check out the live transcript here 👇https://t.co/ErYvwsCzs4
— Armin van Bitcoin ⚡ (@ArminVanBitcoin) January 27, 2018
Be careful chasing Ethereum even if there is a flippening. Bitfinex has issued $60 million ERC-20 tethers pumping the price in the last 10 days. They have moved their scam to an unregulated market.https://t.co/7ejSeM0M36
— Mark Brazis (@BrazisM) February 1, 2018
— NEO Smart Economy (@NEO_Blockchain) January 30, 2018
First or second week recovery out of panic candle takes it back to start of that candle or above. Panic is a highly overrated action, and panic prices are usually fake prices. We’re still in an extreme uptrend and I’m not changing my name for reasons you’ll come to learn. pic.twitter.com/SzDmyaWQM4
— Parabolic Trav (@parabolictrav) February 2, 2018
— Kate Aronoff (@KateAronoff) February 2, 2018
I interviewed three of the largest cryptocurrency exchanges in India: Unocoin, ZebPay, and Coinsecure. Article coming on @Cointelegraph
1. Cryptocurrency ban in India is just FUD2. Finance Minister's words grossly misinterpreted.3. Don't fall for it again.
— Joseph Young (@iamjosephyoung) February 3, 2018
— Cheddar (@cheddar) February 2, 2018
62% retrace of entire move now past us. Quality buying came in. Chance we rally from here, but new lows would not be good. pic.twitter.com/wWnOI1S7cU
— Peter Brandt (@PeterLBrandt) February 2, 2018
— Armin van Bitcoin ⚡ (@ArminVanBitcoin) January 29, 2018
— NEO News (@NEOnewstoday) January 30, 2018
Millennials embrace $BTC et al, in part, as reaction to $217 Tril of global debt and massive wealth inequality forced upon them by Gen X and B-Boomer parents and grandparents. Cryptos are statement: "There must be a better way"
— Peter Brandt (@PeterLBrandt) February 3, 2018
$BTC … Here's 2 *possible* scenarios for the next couple of months. That black curving line is a "predicted projection" of the 200MA, which we really want to stay above if we have any real hopes of breaking the downtrend. pic.twitter.com/Hmi5lnCPpT
— Stackin' ฿its (@nick3ast) February 3, 2018
#bitcoin is scaling! Number of transaction outputs are skyrocketing, yet mempool remains empty. 1-2 sat / byte transactions getting confirmed on the next block. Transaction batching + #segwit + #LightningNetwork in play. 👏🎉⚡️#BitcoinIsScaling pic.twitter.com/1pErC9Wbzs
— Armin van Bitcoin ⚡ (@ArminVanBitcoin) February 3, 2018
30 Technologies of the Next Decade1. #AI2. #IoT3. #Mobile / Social Internet4. #Blockchain5. #BigData6. #Automation7. #Robotics8. Immersive #Media9. Mobile #Technology10. #CloudComputing11. #3DPrinting12. #CX13. Energy #Tech14. #Cybersecurity@SeanMoffitt @Wikibrands pic.twitter.com/MMgl7wfWLu
— Diana Adams (@adamsconsulting) February 2, 2018