Bitcoin Weekly Update #8

By 4C Trading — 05/11/2019 :

This analysis is intended for swing traders or medium-term investors. As a reminder, swing trading is a strategy of speculation in financial markets where an asset is held only for a few days to take advantage of price fluctuations. In this analysis, which you will find every week, I will detail my vision of the market and more specifically the one of Bitcoin. In addition to a technical analysis, I will summarize 3/4 of the news that impacted the market.

What's new?

Last week I gave you my vision on Bitcoin by anticipating a week of range… and that’s more or less what happened. The lesson here is this: after a big increase, boosted by the FOMO of investors there is often a period of calmness.

Why ?

Well, first of all, some of the traders/investors who are happy with the big rise will take out some of their profits, which slows down the ascent process. The longer the slowdown lasts, the more the asset price becomes illiquid and a slight correction occurs until the asset finds buyers, usually in a liquidity zone. In other words, it is just the law of supply and demand.

Secondly, there is the analysis by “whales”/big traders/investors on the reason for the rise. If the latter is justified, they will not seek to bet short but will wait for a lower liquidity zone to reposition themselves. So, the next time you see an extraordinary climb of Bitcoin, be patient. Trust your analysis on the supports, resistances, liquidity zone that are on the graph and play these scenarios.

My graph has not changed much from last week. I have highlighted two possible scenarios for the medium term. These two scenarios are based on the famous gaps in the futures contracts of the Bitcoin CME. For novices, I invite you to read this article to better understand.

  • Scenario 1:
    Breakage of the 9146$ support with high volume, we go down to the area indicated by the light green rectangle: 8500$-8700$. We find liquidity and then we bounce back to seek a gap to fill around 11400$.
  • Scenario 2:
    Bitcoin decides to first fill the gap around 11400$ before falling sharply to fill the gap around 8600$.

In both cases, you should not forget to place a smart stop-loss as explained so well in this article.

Remember that a good trader is above all a person who knows how to manage his risk.

A note to conclude this analysis: here is a tweet I saw this morning, which seems very interesting to me:

As you can see, there is no one way to see things and finding the exact scenario that will happen each time is impossible.

Have a good week, and don’t forget to HODL.

Graphic :

News

  • Binance adds Russian Ruble :

Binance recently added rubles gateways to the exchange, according to the latest update. Russians can now deposit and withdraw rubles through AdvCash or bank cards. AdvCash will charge 3% for each deposit and 2% for each withdrawal. However, deposit and withdraw through AdvCash will be free of charge.

  • British Tax Authority released an update on taxing crypto :

Her Majesty’s Revenue and Customs (HMRC) has released an update on taxing individuals and entities which involved in cryptocurrency. Per the update, HMRC considered the following activities are taxable: trading exchange tokens, exchange tokens for other assets (including different type of crypto), mining, charging cryptoassets for providing goods, services. Moreover, the type of tax will be varied as it based on the entities who involve in crypto business.

  • Bitmex faces several issues related to security :

On October 1st, Bitmex has accidentally sent an update using carbon copy instead of blind carbon copy which leaked a large number of customers emails. Bitmex is currently investigating on the issue. Currently, there are a few rumor says that at least 23 000 emails have been leaked and the number can be higher. Bitmex has just clarified that absolutely nothing but those emails was leaked and that they have taken the necessary measures in order to avoid accidents of the kind in the future.

Nico, analyst at 4C-trading.

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