Bitcoin Weekly Update #10

By 4C Trading — 18/11/2019 :

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 waiting…

I was wrong. I was seeing a consolidation in the 8500$ zone before going up again. My bias was bullish. So during the week, I tried to play a bullish trade. The latter resulted in a neutral trade. Indeed, I had quite quickly raised my stop-loss slightly above my entry price because the increase in which my trade was embedded did not have any real “strength”. Thus, small gains minus transaction costs equal to a neutral trade.

Why do I explain this to you? For several reasons. The first is that a trader is not someone who only makes winning trades but someone who knows how to manage his risk. For more information on how to trade in PnL risk, and to have a good risk management, I invite you to read this article. Then, out of honesty. In fact, in my analyses, I give you my opinion, my bias, my analysis and I know that this will not always be verified. So when I’m wrong, I’ll tell you. Finally, it’s to show you “how” I trade: establish a bias, play it by looking for the best entry, manage its risk and finally wait.

Bitcoin, what’s next ?

The first thing I notice is the decrease in volume, whether it is in daily or weekly periods. The market is “looking for” itself and this bodes well for only one thing: an imminent big move. On the XBT/USD Bitmex graph, we will notice that Bitcoin did indeed break the 0.618 of the Fibonacci retracement, which is equivalent to $8552. Thus, we move on to plan B set out in the weekly Bitcoin analysis #9:

“In the event that 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$/8000$.”

This scenario is therefore relevant. However, another scenario appeared on my screen in the 4h period: a descending wedge which is technically a bullish figure! So, if Bitcoin can’t break the support of this wedge, watch the evolution of the Bitcoin and place yourself at the break of the resistanceof the latter to play a long one that could go very high. As a reminder, we still have this famous gap on the Bitcoin futures market at $11,600.

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

Graphic :

News

  • NYDFS granted Bakkt license for crypto custody : Bakkt recently received permission from the New York Department of Financial to provide custody service for all institutions. Initially, Bakkt chooses Pantera, Tagomi and Galaxy Digital as their digital asset custodians.
  • Ukraine & Crypto : Liga.net recently reported that the Government of Ukraine plans to legalize cryptocurrency soon. Minister of Digital Transformation, Mikhail Fedorov has said that the legalizing cryptocurrency is currently one of main goal of the ministry. Additionally, Mikhail believes that crypto investors, traders will soon come out the grey zone and start paying taxes.
  • Coinbase Card adds 5 more cryptocurrencies and launches in 10 new countries : Coinbase Card which enable it’s users to spend crypto directly from their accounts, is expanding. The five new cryptocurrencies available are : BAT, REP, XLM, XRP and ZRX. This is added to the the original four being BTC, ETH, BCH and LTC. The 10 new countries are : Bulgaria, Croatia, Denmark, Hungary, Iceland, Liechtenstein, Norway, Poland, Romania, and Sweden.
  • Alibaba & Crypto it’s over ? : A new was circulating last week saying that the shopping app Lolli was offering bitcoin rewards to U.S based Alibaba shoppers for “Singles Day”. However, Alibaba representatives have since denied this “partnership” touted by Lolli CEO : Alex Adelman.

Nico, analyst at 4C-trading.

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