Regardless of the overall bearish sentiment and the SEC weighing in heavily against Bitcoin, bulls seem to be stable and recovering. It’s up five percent and reducing their weekly losses to eight percent as buyers reject prices below $6,000-the upper limit of our support zone. Considering the past two trends, we still hold a bearish position and until we see thrusts above $6,800 and $7,000 to the upside, we recommend shorts on high more so once there is a convincing break below $5,800.
From the News
- Bitmain, the world’s largest ASIC manufacturer plans on holding an initial public offering, IPO in the coming months. As it prepares to secure funding, details are emerging that the ASIC marker leader and the company behind one of the largest Bitcoin and Bitcoin Cash mining pools holds more than one million Bitcoin Cash estimated at $650 million at current spot prices and $1 billion in acquisition price by end of Q1 2018. Contrary to our expectation, Bitmain owns about 22,000 Bitcoins. At current prices, their Bitcoin holdings stand at $140 million with an acquisition price marked up to $150 million. However, recent statistics shows that their Bitcoin holding is down to 6,700 BTC following their steady liquidation since the beginning of the year.
- The market is waiting for solid fundamentals before pouncing and riding with the resulting trend. That solid news has to be approval of the Bitcoin ETF by the SEC. Lest we forget, the Bitcoin and crypto market often pans out in similar fashion as other securities. News or even rumors of “certain” approval would definitely jump start reversal of last week’s losses. On the reverse side, a rejection would have an opposite effect dumping prices to new lows. However, let’s get this straight: even if the SEC rejects the VanEck Bitcoin ETF, more ETFs will be up contending for approval and it will just be a matter of time before we get a market propelling nod.
Bitcoin (BTC) Technical Analysis
From the way Bitcoin prices caved in early last week, we didn’t expect prices to follow through over the weekend. That’s exactly what happened and a relief for buyers, there was a clear rejection of lower lows resulting in that rather lower wick in the weekly chart.
Now, if we take a neutral approach then we note that prices are literally moving inside a descending triangle with a nice strong support at $6,000. As mentioned in our early Bitcoin (BTC) trade plans, all we need for bears to be officially in charge is a strong close below $5,800 and $6,000—our support zone.
Still, we retain a bearish stand and as price action nears the apex of this triangle, there will be nullification of this sell projection once buyers shake out bears thrust above the resistance trend line and close above June 2018 highs at $7,000. Then, we shall load longs as before with first targets at $10,000.
At current spot prices, Bitcoin bulls are doing a pretty nice job preventing further depreciation. Nevertheless, despite their efforts, prices are still trending inside Aug 10 bear candlestick and are more than $500 away from breaching and even closing the main trigger line at $6800.
For now and in line with our last Bitcoin (BTC) trade plan, we shall retain a bear outlook as we recommend shorting opportunities anywhere between $6,500 and $6,800 on the upside.
Risk on traders should stay out until we see convincing close below the lower limit of our main support zone at $5,800. For those who took sells according to our previous Bitcoin trade plans, we recommend locking in profits at $7,000.
Disclaimer: Views and opinions expressed are those of the author and aren’t investment advice. Trading of any form involves risk and so do your due diligence before making a trading decision.
Bitcoin image via Shutterstock.