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  • #Bitcoin has headed lower today. After beginning the trading day around $32,500, the cryptocurrency has dropped to currently trade just above $30,000, a key support level in January. $BTC https://t.co/eXJQZRkofe
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Bitcoin: Is The Short-Term High Now in Place?

Bitcoin: Is The Short-Term High Now in Place?

Nick Cawley, Strategist

Talking Points

- Last week’s Bitcoin high near $4500 looks unlikely to be tested in the short-term as negative chart patterns appear.

- Ethereum also turns sharply lower but 'hard fork' may provide support.

If you are new to trading, or want to hone your skills further, join the DailyFX Free Online Forex Trading University.

The latest volatile shift in Bitcoin saw the digital token hitting a fresh high before slumping nearly 20% as profit-taking took hold of the market. And a couple of bearish indicators stand out on the daily chart, leaving the token vulnerable to further moves lower. A look at the chart shows a bearish engulfing candle formation on Tuesday, August 15th, a pattern that is normally seen at the end of a bullish/upward trend. The high made on that Tuesday ($4430) was just a touch lower than Thursday’s, August 17th all-time high ($4480). And the spinning top chart pattern on Thursday gives another signal that the market is currently running out of upward momentum. A spinning top normally forms at the peak of an uptrend and suggests that buyers are losing interest, leaving the asset class vulnerable to a sell-off.

Chart: Bitcoin (BTC) Price: Daily Timeframe (June - August 22, 2017)

Bitcoin: Is The Short-Term High Now in Place?

Chart by IG

And the second largest digital currency by market cap, Ether (ETH), also soared and slumped in the last few days, but is still way below its all-time high. Monday’s jump to just $350 was fuelled by news that Ethereum will release a new update (hard fork) called Metropolis in late-September, similar to the Bitcoin hard fork at the start of the month. The Ethereum update will make programming easier and upgrade security to prevent hacking.

A look at the charts sees the 50% fibonacci retracement level around and the August 15 low both offering support around the $273 level, while the August 16 and 19 lows around $280 will also provide additional support.

Chart: Ether (ETH) Price: Daily Timeframe (May - August 22, 2017)

Bitcoin: Is The Short-Term High Now in Place?

Market Moves/Top 8 Capitalizations – August 22, 2017

Bitcoin: Is The Short-Term High Now in Place?

I will be discussing Bitcoin Trading and Strategy on Wednesday Aug 23 at 12:00 pm – if you would like to join me, please click here.

Bitcoin Glossary: Key Terms and Concepts for Traders.

If you are interested in trading digital pairs and would like to practice trading either BTC or ETH, you can create a Quick and Free Demo Account Here

--- Written by Nick Cawley, Analyst.

To contact Nick, email him at nicholas.cawley@ig.com

Follow Nick on Twitter @nickcawley1

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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