Bitcoin Weekly Update #9

By 4C Trading — 12/11/2019 :

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.

The rebound?

As a reminder, here is what I wrote 7 days ago in the weekly Bitcoin analysis #8:

“Scenario 1: Break 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 Bitcoin rebounds (…)”.

And guess what? This is exactly what we experienced with Bitcoin during the week. The gap on CME futures contracts is now well filled. There’s only one left around $11,600.

At 4C-trading, we played the rebound that Bitcoin had just after entering the so-called liquidity zone indicated by the light green rectangle. This resulted in the opening of a long position with a well defined stop-loss and 3 targets that were all reached. Note that thanks to our copy trading function, you no longer even need to be behind your screen because everything is done automatically. 4C-trading also offers other products that I invite you to look at on their website.

What happens next?

For me, and this only implies me, I will opt for consolidation in the area where we

are currently located — the famous light green rectangle — before going up again.

The reasons?

First, on a weekly time scale, we see that the MACD curves are getting closer and thus a bullish crossover becomes more and more possible. Then, as you can see on the associated graph, I plotted the retracement of Fibonacci over the entire figure shown between $7330 and the local high point at $10596. It can be seen that Bitcoin reached the 0.618 of the retracement before rising again. So, as long as this level holds, i.e. the Bitcoin consolidates above I remain bullish. Finally, from a fundamental point of view, all the news recently concerning Bitcoin is incredibly encouraging/bullish.

So we’re back on an upward trend, that’s for sure? The answer is NO. I am giving you my opinion, part of my analysis and I will therefore look for long positions during the week. All this of course with a stop-loss and precise risk management. It is important to build up your own bias on the trend in order to be able to identify your entry areas for scalping trades.

In case the current zone does not hold and the 8500$ is broken with a high volume, the bullish bias will no longer be valid and the Bitcoin will look for its support zones around 7900$/8000$.

I hope you enjoyed this analysis and wish you an excellent week.

News

  • Bakkt Bitcoin futures volume new all-time high : Bakkt’s Bitcoin futures contracts has started to really pick up steam. Last Friday, the daily volume hit a new ATH of $15.5 million.
  • Tunisia becomes first country to issue a Central Bank Digital currency : We can definitely say that the race to create Central Bank Digital currency has started. Europe is talking about it, China is talking about it, the FIVE (Amazon, Facebook…) are also considering it.
  • The Basel Committee is researching on the threshold for covering crypto losses : According to Business Reporter, the Basel Committee on Banking Supervision is studying the minimum threshold of capital for a crypto business to cover any risk related to cryptocurrency holding. The committee also have agreed to publish a paper on treatment for cryptocurrencies which is not backed by tangible assets.
  • Binance adds support EUR : Along with UAH, RUB and KZT, Binance customers can now deposit and withdraw their EUR through AdvCash. Additionally, CZ promised that the exchange would soon add more channels for EUR and support for AED.

Nico, analyst at 4C-trading.

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