Weekly Technical Report on Crypto-Currencies dated 15th Jan 2020
BTC USD (CMP: $8745)
Thanks to some strong short covering taking place over the past two weeks, Bitcoin has recovered almost 60% of its value it lost since October top was made at 9600 odd levels. The million dollar question is: Does it reverse the primary downtrend that we saw almost for the second half of 2019? Unfortunately, that is not the case (as yet).
Taking a bit longer view, let us examine the weekly chart of BTC. Prices made a top at 13000 in July 2019 and after that, supply overcame demand and it entered into a spiraling downward trend. During the second half of bygone year, the series of lower tops are quite easily identifiable on the weekly chart of BTC. These progressively lower tops are indeed the signature of a primary downtrend and as long as this series is not broken, we cannot say for sure that a bottom has been established or for that matter, the downtrend was reversed.
Last time, the lower top was made, it was 9350 on weekly chart after which prices came down as low as 7000 levels and now it is again rising and in the process of making another top (not complete as yet). So, 9350 assumes importance at this level. If BTC manages to go past and gives a weekly closing above it, only then we can say with lot of certainty that the downtrend has been ended.
But that does not mean if there was any short term pull back upside, we cannot take advantage of that. As a trader, surely we can do so. For example, we observe that Tuesday’s breakout above 8200 was significant and it is now a support zone. So short term weaknesses can be used to enter long position with stop loss at 8200. Primary downtrend resumes below that.
Published at Wed, 15 Jan 2020 13:08:22 +0000
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