Three dojis mean trouble for Bitcoin

• BTC/USD sticks to $6,445 amid market indecision.

• The imminent breakthrough will be forceful and devastating.

Bitcoin is changing hands at $6,445 at the time of writing. The digital coin No.1 has barely changed since Tuesday, sitting in the tightest range in its recent history. Three doji candlesticks on a daily chart highlight a high level of indecision on the market and promise forceful breakthrough once this coiled spiral starts unwinding.
 

Bitcoin's technical picture

As it is visible on Bitcoin's daily chart, the price has fairly moved since recovering from long-term sloping trendline on Tuesday. While a sustained movement above $6,400 handle looks positive for the bulls, lack of follow through and a prolonged period of consolidation mires short-term perspectives.

Considering the lack of fundamental catalysts it is hard to predict the direction of the breakthrough; however, the bulls' nearest target is $6,600. This resistance limited the recovery since the end of September. Enhanced by DMA50 and 38.2% Fibo retracement monthly, this level can attract new short-term sellers and push the price back inside the current range.

On the downside, bears are focused on $6,400 with a confluence of strong technical levels clustered on approach. They include 61.8% Fibo retracement weekly, 23.6% Fibo retracement monthly, one day low, Pivot Point 1-day Support 1, and a host of SMA levels. Once below, the sell-off will gain traction and take the price to $6,200 and possibly $6.060 (the recent low).

BTC/USD, the daily chart

Tanya Abrosimova

FXStreet

David – http://markethive.com/david-ogden

Following the strong run-up in bitcoin prices yesterday, traders may now be eyeing another opportunity for further growth as the short trade is getting unusually crowded for the number one cryptocurrency.

In what appears to be short-term traders positioning themselves for a further sell-off in bitcoin on the Bitfinex exchange, the ratio of short-to-long orders on the exchange reached 1.54 during the Asian trading session Tuesday morning, a level not seen since November last year.

Short-selling essentially involves speculating on lower prices in a market by borrowing an asset that a trader doesn’t currently own in order to sell it in the market. The asset can then be bought back at a lower price later, allowing the short-seller to profit from the difference between the selling price and the buying price.

While a high number of sellers in a market is generally considered a bad sign, it also opens up opportunities when it reaches extreme levels. This is what is known as a short-squeeze, and it is something we have seen repeatedly this year as the short-to-long ratio has hit the high levels we are at now.

If the market starts to move upwards in the near future, many of the short-sellers will exit their short positions by buying back bitcoins in the open market. As the price moves further up, even more short-sellers will get margin calls or hit their pre-set stop-loss levels, forcing them to cover their shorts, and creating a self-reinforcing mechanism that can cause sharp price increases. Whether this will happen again this time, however, still remains unclear.
 

Significant arbitrage opportunities

Another possible explanation is that there is a significant amount of arbitrage going on right now centered on the Bitfinex exchange, following the surge in the bitcoin price yesterday that brought the price on Bitfinex to nearly USD 7,800 at its peak. That was close to USD 1,000 higher than on other exchanges like Coinbase, where bitcoin reached a high of about USD 6,800 yesterday.

An obvious way for traders to take advantage of a situation like that is to short-sell bitcoin on Bitfinex, while buying bitcoin on Coinbase or another exchange. That way, a trader would be profiting as the price gap between the exchanges closes.

The bitcoin price was nearly unchanged across exchanges on Tuesday morning, and still remains significantly higher on Bitfinex than on other exchanges, which many in the community attributes to speculation and fear about the status of the popular stable coin Tether.

Price differences at exchanges:

By Fredrik Vold

October 16, 2018

David – http://markethive.com/david-ogden

Bitcoin price analysis – Break of $6,000 or breakout to $12,000?

• BTC nearing a point of breaking out on the long term.

• Falling wedge suggests, it should be upside breakout.

Bitcoin, the largest cryptocurrency by market capitalisation and defacto King of the crypto world, has been trading in a broad range of $6,000-$7,000 for past many weeks and is now reaching a point where it is potentially make or break for the bulls.

BTC/USD is down one cent of a percent at $6,185 in less than one percent range for the day, in a sign of lower weekend volatility. After falling from the upper end of the range, which is also a descending trendline resistance, BTC is now heading towards lower end of it – around $5,900.

This wedge formation, although has failed many times in the past, could be one positive trigger that the bulls were searching for. If bulls manage to bounce from the lower end of this range, then the next move on the upside should result into a breakout with potential targets of beyond $12,000 in the next few months.

BTC/USD daily chart:

Manoj B Rawal

FXStreet

David – http://markethive.com/david-ogden

Bitcoin price analysis – BTC/USD recovery attempts capped by $6,200; Bitcoin not as volatile as it may seem, research shows

• BTC/USD movements are contained by $6,100-$6,200 range.

• Researchers proved that Bitcoin volatility matches traditional markets.

After a short-lived dip to $6,060 low on Thursday, BTC/USD found a floor at $6,100. The recovery attempts have been limited by $6,216 handle so far, which means that a stronger trigger is needed to push the coin out of this range. BTC/USD is changing hands at $6,190, mostly unchanged in the recent 24 hours.
 

Bitcoin's technical picture

A sustainable movement above $6,200-$6,216 congestion zone will open the way towards $6,300 followed by SMA50 (1-hour) at $6,340, where fresh selling interest is likely to appear. However, if this area is cleared, the upside movement will start gaining traction with the next aim at the broken downside trendline at $6,480 strengthened by SMA200 (1-hour) and psychological $6,500.

On the downside, the critical support is located at $6,100, strengthened by Thursday's low at $6,060, Once below, the sell-off will continue to $6,000
 

Pretty stable
 

A recent study performed by Stanislaw Drozdz from the Institute of Nuclear Physics of the Polish Academy of Sciences revealed that Bitcoin is much more stable than it might seem. The researcher found out that the coin market is very similar to traditional financial markets in terms of stability.

“When new emerging financial markets started to appear in Central and Eastern Europe after the collapse of socialism, the question of their stability naturally arose. A number of statistical criteria were identified at that time, making it easier to assess the maturity of the market. We were curious about the results we would get if we used them to look at the Bitcoin market, currently valued at hundreds of billions of dollars,” Stanislaw Drozdz wrote.

The research team analyzed Bitcoin prices in a period from 2012 to April 2018 and the rates of return over the same timeframe. They found out that the volatility of rates of return is comparable to mature markets.

Tanya Abrosimova

FXStreet

David – http://markethive.com/david-ogden