Friday market report – Moonhub
TL;DR we need some boredom in the market for a few weeks.
It has been another turbulent few days on the crypto markets. Bitcoin price drifted lower in the early part of the week, falling as low as $7,102 (Bitstamp) on Wednesday.
Then, out of nowhere, we saw a $600 green candle, with BTC spiking to almost $7,800 in the space of just 15 minutes. This is a classic play by whale manipulators: in low-liquidity conditions, it’s easier to push the market around and margin call traders who are over-leveraged. Longs had been stacking up on BitMEX, and many analysts were warning of a long squeeze at the time. The opposite occurred, with short traders getting wiped out — before the manipulator flipped the switch and dropped the market back to its starting point almost as quickly, destroying new longs. Net result: the market closed Wednesday flat, but with a massive ‘shooting star’ doji, with a long wick to the upside.
Since then bitcoin has consolidated around $7,350, right on the support/resistance zone that goes right back to May, and has been re-established in the last six weeks.
Overall, BTC is still trading within the downward channel that started back in June. It is still following the pattern of lower highs; after the last low around $6,500, we cannot yet say whether the pattern of lower lows has yet been broken. Ideally, we want to see a break of resistance at $7,800 — and ultimately $10k. MACD is green on the 4h, 12h and 1-day timeframes, but BTC is still trading under the major moving averages.
Realistically, what we need now is a period of low volatility — for the market to take a rest and consolidate. That would prepare the ground for a new bullish move. Above $7,800 would be the ideal level to do that, since for now, the path of least resistance is to the downside. There are reasons for optimism: RSI is making higher highs, and support has been maintained for now. But we do not expect a massively bullish end to the year.
In other news, hashrate has leveled out and even dropped a little. We’re watching this carefully, since it means that miners are getting squeezed and some are going out of business. As miners contemplate the Halving in less than six months, many will be deciding whether to switch off their rigs early or not bother updating them, knowing that their revenues are about to be slashed. It would be better if this was a gradual, orderly process than a chaotic and unplanned event, so price stability would also be helpful here.
Article by Moonhub
Published at Fri, 06 Dec 2019 15:59:29 +0000
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