After hitting highs approaching $14,000 last week bitcoin (BTC) started off July on a huge downturn as it actually fell through the $10,000 level earlier today according to CoinDesk data.
Rakesh Upadhyay’s analysis in Cointelegraph
Earlier today Upadhyay provided an analysis of the price movements of bitcoin and other prominent cryptocurrencies on Cointelegraph.
Before discussing bitcoin, Upadhyay notes that Adam Back the CEO of BLockstream claimed in a recent panel discussion that developments in the crypto space are occurring at a much faster clip than during the dotcom period. Numerous new ideas and uses are being found for the blockchain technology but Back still thinks we are in the early stages of what can be built using the new technology.
Recent fundamental developments in the use of blockchain technology and the cryptocurrency area have caused some former critics of cryptocurrencies to alter their views and even adopt the new technology. Augustin Carstens, the head of the Bank of International Settlement(BIS) said recently that many central banks are working to launch digital versions of their national currencies The BIS is supporting this move. Only a few months back Carstens was warning of the numerous risks of banks taking such a turn.
On bitcoin (BTC)
After a huge surge recently, every trader is wondering whether the short term top has been reached or if this drop presents a buying opportunity to be used before the uptrend continues. It is difficult to predict which view is correct but charts give a reasonable idea of what can be expected.
BTC hit a wall of resistance back on June 28 and 29th close to the $12,500 level. As the bulls were unable to resume the upward trend profit-taking took place. Currently the price has dipped down to the 20-day Exponential Moving Average(EMA). Wikipedia describes the EMA as follows: “An exponential moving average (EMA) is a type of moving average (MA) that places a greater weight and significance on the most recent data points. The exponential moving average is also referred to as the exponentially weighted moving average. An exponentially weighted moving average reacts more significantly to recent price changes than a simple moving average (SMA), which applies an equal weight to all observations in the period.”
If BTC is to continue upward again, the bulls will need to defend the $10,740.35 to $9,97713 support zone. A break through this zone could lead to a drop in the price to the 50-day simple moving average (SMA). The BTC will be in a bearish grip should the price move down through the 50-day simple moving average. It is thus difficult to know exactly when the price could change direction.
The 20-day EMA has flattened out and the relative strength index (RSI) is now close to a midpoint. A consolidation after a sharp rally would be a positive sign. It would show that traders not exiting the market. However, Upadhyay’s recommends waiting for the correction to end before buying bitcoin again.
24 hours ago bitcoin was trading at $11,392. Since then it has hit a low of $9,986 and a high of $11,440. The drop has not taken BTC through the support zone range mentioned by Upadhyay. At 21:14 BTC has recovered somewhat from its low and was trading at $10,319 a drop of $1,073 from its open.All the top twenty altcoins are also down but not as much as bitcoin with none in double digit declines. The present price of bitcoin along with the top twenty altcoins can be found here.