Bitcoin Price Enters Next Chart Trading Range
Bitcoin News and Talking Points
- BTC ‘higher lows’ continue but the rally may be running out of steam in the short-term.
- Bitcoin has two defined trading zones and a break on the upside would see $12,700 coming into play.
Bitcoin’s Grind Higher Continues
Bitcoin’s (BTC) rally from its February 6 low just above $6,000 continues but is showing signs of exhaustion as it trades in and around the second price zone between $10,700 and $11,700. The recent run of ‘higher lows’ remain intact but the last three daily candles may indicate that a period of consolidation is on the cards before the digital token pushes further ahead. A clear break and close above this zone would open the way to the next Fibonacci retracement level of the November –December move at $12,690, our near-term target.
The cryptocurrency market is also expected to be quiet this week as China has now started the week-long Spring Festival holiday. China remains one of the largest cryptocurrency markets and overnight trade normally helps to shape the European and American markets. The US is also on holiday today – President’s Day – so turnover is expected to remain quiet.
Bitcoin (BTC) Price Chart in US Dollars(September 28, 2017– February 19, 2018)
Top 10 Cryptocurrencies by Market Capitalization in US Dollars – February 19, 2018
Bitcoin Retail Sentiment Indicator Still Bearish
IG Client Sentiment Data show 75.6% of traders are net-long BTC with the ratio of traders long to short at 3.09 to 1. The number of traders net-long is 3.2% higher than yesterday and 9.0% higher from last week, while the number of traders net-short is 4.2% lower than yesterday and 23.1% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Bitcoin prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Bitcoin-bearish contrarian trading bias.
Cryptocurrency Trader Resources – Free Practice Trading Accounts, Guides, Sentiment Indicators and Webinars
If you are interested in trading Bitcoin, Bitcoin Cash or Ethereum we can offer you a wide range of free resources to help you. We have an Introduction to Bitcoin Trading Guide along with a Free Practice Account. In addition we run a Weekly Bitcoin Webinar and have an IG Bitcoin Sentiment Indicator to help you gauge the market and make more informed trading decisions.
What’s your opinion on Bitcoin and the latest rally? Share your thoughts with us using the comments section at the end of the article or you can contact the author via email at Nicholas.firstname.lastname@example.org or via Twitter @nickcawley1.
--- Written by Nick Cawley, Analyst.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.