What Does Technical Analysis Tell Us About Bitcoin Prices?
Bitcoin prices have been trading range-bound for several weeks. (Photo by INA FASSBENDER / AFP) ... [+] (Photo by INA FASSBENDER/AFP via Getty Images)
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Bitcoin prices have been trading within a reasonably well defined range, a state they have continued to experience for several weeks.
The world’s most prominent digital currency has been trading largely between $30,000 and $42,000 since late May, according to CoinDesk.
It has been following this pattern after rallying to a fresh, all-time high of more than $64,000 back in April, before losing much of what it gained in 2021, additional CoinDesk figures reveal.
As the cryptocurrency continues to experience this relative malaise, various technical analysts have weighed in on when it might see greater volatility.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
The ‘Calm Before The Storm’
“We are clearly in a consolidation phase which can also be called the ‘calm before the storm,’” said Kiana Danial, CEO of Invest Diva. “That means, we are bound to see a breakout soon.”
She elaborated on this statement, providing analysis indicating that bitcoin’s current momentum is a little bearish.
“The BTC/USD pair remains below the daily Ichimoku cloud and has broken below the 4-hour Ichimoku cloud, indicating the bearish pressure is stronger than the bullish,” said Danial.
“Additionally, the pair has been forming lower highs in the past month, also indicating the bearish sentiment is slightly stronger than the bullish one.”
David Keller, chief market strategist at StockCharts.Com, offered a similar perspective.
“The chart of Bitcoin has been in distribution mode since April, with successively lower momentum peaks on each rally over the last three months,” he stated.
“I would expect the path of least resistance to remain lower given the weakened momentum characteristics.”
A Bullish Assessment
Nick Mancini, research analyst at crypto sentiment data provider Trade The Chain, provided a more bullish perspective than the aforementioned experts.
“Looking at Bitcoin’s future, we can see a glimpse of bullishness on the price chart,” he stated.
“The Bollinger Bands (BBs) are currently tightening around Bitcoin’s recent movements, which is usually a signal for a large move in price. It is currently trading on the lower bound band, and we expect that it may reverse in the near future given the recent sentiment spike,” said Mancini.
Further, he noted that there is “an inverse head and shoulders forming.”
“Inverse head and shoulders have two shoulders, a head, and a neckline, and typically push bullish if and when the neckline is broken. In this case, the neckline is the 200-Day Moving Average, which has been a stalwart for Bitcoin price action since June.”
Levels To Watch
As market observers continue to monitor bitcoin’s price movements, analysts weighed in on the key levels of support and resistance they should look out for.
Mario Gomez Lozada, CEO of trading platform PowerTrade, noted that “BTC has been consolidating between 0.618 and 0.5 fib levels that has created strong bearish and bullish cases.”
“If BTC price breaks down the support of 30-31k, it could go straight down to the next fib support level which is at around 24.8k that can potentially touch the long term trend line (yellow) at 20k,” he added.
Keller spoke to similar numbers, stating that:
“Bitcoin’s decline has been tempered in May and June as price has found consistent support around the $30,000 level. A break below this key support level could indicate a new influx of selling that could push Bitcoin down to the low $20,000s.”
However, the two analysts also mentioned important resistance levels the digital currency could encounter.
“A break above $40,000 would negate the downward trend we've seen in recent months and suggest further upside,” said Keller.
“First, Bitcoin would need to eclipse trendline support using recent highs on the hourly chart, currently around $34,000.”
Lozada said that if the digital asset surpasses $39,000 before the end of this month, it will “break out to the upside in a very quick fashion” as it continues the bull run.
He emphasized that “As the Bollinger Band is very stretched,” bitcoin could potentially enjoy significant upside.
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether and EOS.
Identity Thief Used Burner Phones And Apple Pay To Buy Diamond-encrusted Bitcoin Medallion — And Actual Bitcoin Too
It was almost every kind of modern-day financial swindle rolled into one.
The mastermind behind an elaborate stolen credit-card scam that used bitcoin, burner phones and digital wallets such as Apple Pay to swipe more than $600,000 in luxury goods, has been sentenced to three years in federal prison. (Apple was not immediately available for comment.)
Prosecutors in Washington state said that between February 2017 and December 2018, Aaron Laws, 33, of Atlanta, bought more than 500 stolen credit-card numbers from the dark web and loaded them onto the digital wallets of prepaid cell phones. Paying with digital wallets means that purchases can be made without having to present an actual credit card.
Laws then enlisted several co-conspirators to go into electronics shops including the Apple store and Best Buy and jewelry stores across eight states to buy big ticket items using the stolen card details, prosecutors said. (Best Buy was not immediately available for comment.)
The swag ranged from dozens of Macbooks and iPhones, a $35,000 Rolex watch and multiple pieces of jewelry, including a diamond-encrusted medallion in the shape of the bitcoin symbol.
Prosecutors did not put a price tag on the medallion, but in a single day, Aug. 23, 2017, Laws purchased $93,000 worth of bitcoin BTCUSD, they said.
Laws would quickly sell the items to other electronics brokers and would take the proceeds to buy bitcoin through accounts he set up in phony names on trading platforms like Coinme, prosecutors said.
Prosecutors say Laws had prior arrests for similar kinds of activity in Colorado and Georgia. He was sentenced in 2017 to serve jail time on the weekends in Atlanta for identity theft and financial fraud, yet continued to operate the scam when he was free during the week.
“Motivated by greed, this defendant attempted to use digital advances to hide his old-fashioned fraud,” said Tessa Gorman, the acting U.S. Attorney for the Western District of Washington state “At all phases — from accessing the dark web, to loading stolen data onto digital wallets, to acquiring prepaid anonymous phones, to adopting aliases, to laundering money through anonymous cryptocurrency accounts — his operation was sophisticated and difficult to detect. But ultimately law enforcement stopped him in his tracks.”
In a court filing ahead of his sentencing, Laws admitted he had “clearly made many poor decisions in this case.” He said that the scam had come during a period in his life when he struggled with depression and substance abuse which had started after his pursuit of playing college basketball ended following a serious knee injury.
A message left with Laws’ attorney wasn’t immediately returned.
Laws was indicted in December 2018, and pleaded guilty in January 2020 to charges of conspiracy to commit bank fraud and aggravated identity theft. In addition to his prison term, Laws was ordered to pay $624,000 in restitution.
Two co-conspirators in the case, Dennison Ellis and Jeffrey Mayfield, who were childhood friends of Laws’, also pleaded guilty last year. Ellis was sentenced to six months in prison and ordered to pay $283,000 in restitution, and Mayfield received time served and was ordered to pay $181,000.
At his sentencing hearing, U.S. District Judge Robert S. Lasnik said Laws “had a very complicated criminal enterprise and nothing seemed to deter him.”
Leaked JPMorgan Report Reveals Extreme Bitcoin Price Volatility Warning As Ethereum Crash Adds To $100 Billion Crypto Rout
Bitcoin has swung wildly through 2021, falling along with the second-largest cryptocurrency ethereum after huge runs and dashing hopes that growing adoption among retail investors and institutions would bring stability to roller coaster crypto markets.
The bitcoin price is down around 50% from an April peak that saw it more than double in the first three months of the year (subscribe now to Forbes' CryptoAsset & Blockchain Advisor and beat the market). Ethereum has fallen even further from its May high of well over $4,000 per ether token, today dropping a further 5% and dipping under $2,000 amid a cryptocurrency sell-off that's wiped around $100 billion from the combined crypto market in less than a week.
Now, Wall Street giant JPMorgan, after correctly calling May's cryptocurrency crash, has warned over El Salvador's controversial plan to adopt bitcoin as legal currency—pointing to bitcoin's low trading volume outside of major exchanges and its extreme price volatility as possibly "a significant limitation on its potential as a medium of exchange.”
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Bitcoin has found fresh support this year but it's thought El Salvador's plan to adopt bitcoin as ... [+] legal tender could be hampered by wild swings in the bitcoin price. Meanwhile, an ethereum sell-off has added to a $100 billion crypto rout.
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"Daily payment activity in El Salvador would represent [around] 4% of recent on-chain transaction volume and more than 1% of the total value of tokens which have been transferred between wallets in the past year," JPMorgan analysts wrote in a report out last week and seen by Bloomberg, adding a "significant and rising fraction [of bitcoin is] held by wallets with light turnover."
The report pointed to bitcoin trading volumes that commonly exceed $50 billion per day but mostly happen on major crypto exchanges, with a large portion of bitcoin now thought to be locked up in illiquid entities and 90% of bitcoin not moving in over a year.
El Salvador president Nayib Bukele announced his plan to make bitcoin legal tender in the country alongside the U.S. Dollar in early June at the Bitcoin 2021 conference in Miami. The plan was recieved with great fanfare but it remains light on detail even after it was rushed through the country's Congress, passing into law just days later with little scrutiny.
Bitcoin proponents, led by Bukele, claim El Salvador's formal adoption of bitcoin in early September will cut the cost of remittances and boost financial inclusion among the country's unbanked.
However, JPMorgan researchers see bitcoin’s high volatility as a major challenge alongside the country's official dollarization and warn a high demand for bitcoin to U.S. Dollar conversions on the government's bitcoin spending platform could "cannibalize onshore dollar liquidity."
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MORE FROM FORBESCrypto Price Warning: Goldman Sachs Issues Surprise Future Of Bitcoin And Ethereum PredictionBy Billy Bambrough
The bitcoin price has fallen sharply from its highs of almost $65,000 earlier this year but remains ... [+] far higher than its price of around $10,000 this time last year.
Coinbase
Meanwhile, bitcoin rival ethereum is also grappling with eye-watering volatility as a sell-off that began in May drags on.
While ethereum has see a flood of adoption and attention this year thanks to the twin decentralized finance (DeFi) and non-fungible token (NFTs) crazes—both almost entirely built on ethereum's blockchain—the ethereum price has swung even more wildly than bitcoin.
But despite its heavy losses over the last few weeks, those who have invested and work with the technology remain confident it can succeed.
"With ethereum, you are betting on the adoption of a protocol in the realm of decentralized finance and smart controls," J.P. Theriot, the chief executive of New York-based digital money platform Uphold, said in emailed comments. "The genie is out of the bottle, and it isn't going back in."