Bitcoin Price Technical Analysis for 03/02/2018 – Aiming for $12,000?

Bitcoin Price Key Highlights

  • Bitcoin price is gaining more traction on its climb as it recently bounced off the bottom of its ascending channel
  • Price seems to be aiming for the mid-channel area of interest or the highs near the $12,000 major psychological mark.
  • Stronger bullish momentum could take bitcoin price to the channel resistance itself.

Bitcoin price is on a steady climb and holding its head above the ascending channel support, but technical indicators are signaling profit-taking.

Technical Indicators Signals

The 100 SMA is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside or that the rally could go on. The moving averages are also close to the channel support to add to its strength as a floor.

However, stochastic is already in the overbought zone to suggest that buyers are feeling exhausted. Turning lower could draw sellers back in and lead to another test of the channel support around $10,500-11,000.

RSI is on the move up and hasn’t quite reached overbought levels yet but it also seems to be turning lower. A break below the channel support could be an early indication of a reversal from the climb.

Market Factors

The US dollar was in a weak spot in recent sessions as fears of a trade war were revived when Trump announced plans to impose higher tariffs on steel and aluminum. Risk aversion also returned, weighing on stocks and commodities, but bitcoin price managed to maintain its lead.

This suggests another shift in the market dynamic as bitcoin price appears to be gaining ground on risk-off moves once more. This behavior has been seen in the past when the cryptocurrency takes advantage of geopolitical risk to provide higher returns in this type of environment.

Although regulation in the industry has also been a hot topic recently, investors seem to be banking on more positive developments similar to the acquisition of Poloniex by Circle a few days back.

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FOMO Moments

The markets have been a mixed bag during this morning’s Asian trading session. They are mostly up though as traders stock up for the weekend. Bitcoin has rallied by 6.5% despite the SEC’s investigation into US ICOs yesterday. Altcoins have made marginal gains but as usual we see one that is racing away from the rest and today it is Tron.

Coinmarketcap has TRX trading 25% higher on the day. Trading at $0.042 this time yesterday the altcoin made a couple of jumps a few hours ago to propel its price up to $0.056. While this doesn’t sound a lot, percentage wise it is significant which makes it today’s leading cryptocurrency. Tron has had a tough year, in classic pump and dump formation it spiked to a high of $0.26 in early January but like a lot of the other high supply coins has fallen back since then.

Founder, Justin Sun, has been lambasted on social media for his frequent partnership announcements in an effort to shill the coin. The entertainment’s based altcoin has made a few partnerships however but none large enough to raise the price anywhere near to its fomo inspired all-time highs back at the beginning of the year. This current pump has been caused by Bittrex which announced that TRX would be listed on the exchange.

The majority of TRX is currently traded on Binance which has 56%, second is Chinese exchange Huobi. TRX has fallen from number six in the market cap charts down to 14 with a cap of $3.5 billion. The supply stands at 100 billion with 65 billion circulating, 24 hour trade volume has been $475 million.

Other altcoins enjoying double digit increases during the Asian trading session this morning are Monero, Lisk and Verge.

More on Tron can be found here:

FOMO Moments is a section that takes a daily look at the top 25 altcoins during the Asian trading session and analyses the best performing one, looking for trends and fundamentals.

Key Points

  • Bitcoin cash price succeeded in moving higher and settled above $1,250 against the US Dollar.
  • There was a break above yesterday’s highlighted key bearish trend line with resistance at $1,220 on the hourly chart of BCH/USD (data feed from SimpleFX).
  • The pair is now trading in a positive zone and it may break $1,300 for further gains.

Bitcoin cash price is gaining momentum above $1,250 against the US Dollar. BCH/USD is likely to extend gains once it break the $1,300 resistance.

Bitcoin Cash Price Support

There was a fresh upside wave initiated from the $1,175 swing low in bitcoin cash price against the US Dollar. The price traded higher and it was able to break two important resistance levels – $1,200 and $1,220. More importantly, there was an hourly close above the $1,200 level and the 100 hourly simple moving average. It opened the doors for more gains above $1,250.

During the upside move, there was a break above yesterday’s highlighted key bearish trend line with resistance at $1,220 on the hourly chart of BCH/USD. The pair even surged above the $1,265 level and traded as high as $1,291. At the moment, the pair is consolidating in a range above the $1,265 level. A contracting triangle is forming with current resistance at $1,290 on the same chart. Once there is a break above the $1,290 level, the price may break the $1,300 resistance for more gains.

Bitcoin Cash Price Technical Analysis BCH USD

On the downside, an initial support is at $1,270. A break and close below the $1,270 support could trigger more losses. The next major support is around the 38.2% Fib retracement level of the last wave from the $1,175 low to $1,291 high.

Looking at the technical indicators:

Hourly MACD – The MACD for BCH/USD is now moving nicely in the bullish zone.

Hourly RSI (Relative Strength Index) – The RSI for BCH/USD is currently well above the 50 level.

Major Support Level – $1,250

Major Resistance Level – $1,300


Charts courtesy – SimpleFX

Alex Grebnev, a former banker at Goldman Sachs, is creating a platform that will permit traders to deal more comprehensively with cryptocurrencies. The platform, called Oxygen, intends to target private and institutional investors seeking to cut repurchase agreements, or “repos,” among themselves. According to Forbes, Oxygen is set to be launched later this year. 

If the operation is successful, the crypto-space will move even further into the mainstream: This past December, Chicago-based exchanges CME Group and Chicago Board Options Exchange (CBOE) launched Bitcoin futures contracts.

Grebnev, who while working at Goldman Sachs dealt with stocks and derivatives for almost ten years, is working with cryptocurrency exchange Changelly, with plans to launch Oxygen on Changelly’s infrastructure — in turn permitting the repo platform access to the exchanges 1.6 million clients. At launch, Oxygen will accept ERC20 tokens, the popular token standard of Ethereum. After it hits the market, Oxygen plans to integrate Bitcoin and other cryptocurrencies as well. 

How Does it Work?

In a repo, one entity sells an asset (cryptocurrencies in this case) to another at a certain price at the start of the transaction and pledges to repurchase the asset from the initial buyer at a future date, at a different price. If the seller fails to buy back the asset, the buyer can put it on the open market, which makes the asset a kind of collateral during the repo.

Cryptocurrency holders would generate profits from lending their coins through Oxygen to a second party. In return, they would receive another coin as collateral until their initial token is returned. The second party would use the borrowed coin for short-term trading or transactions and will have to pay a fee as part of the deal.

Grebnev predicts the platform will stabilize the cost of borrowing cryptocurrencies, whose price fluctuations can deter investors who want to bet on falling prices, known as taking a short position. He expects repo agreements to be struck for periods ranging from hours to a year or two.

With regards to the growth and development of cryptocurrencies as an asset class, Grebnev had the following to say:

“The cryptocurrency market is developing very fast, but it should also be developing on a professional level, with the application of real-world concepts. There are already a number of users utilizing the crypto market and in order for it to develop, real world applications must be brought into the crypto world. This is why we are applying the repo market to the crypto market – users can  profit without losing their assets.”

Cryptocurrency payments appear to be finding a niche within the real estate industry. There are already several documented examples of people wishing to trade a property in exchange for digital currency. Some experts are predicting that the trend will continue and we will see more of these deals in future.

Buying a Home With Bitcoin is Easy

There are some key advantages of using cryptocurrency to pay for property. The most prominent of which would be a lack of middlemen required to complete a sale, as well as the ease and low cost of sending large sums of money from one party to another. Director of Communications at the Coin Center, Neeraj Agrawal, told the LA Times:

“Within the context of real estate, it makes sense to use cryptocurrency in those types of transactions… Cryptocurrency is a way to send large amounts of money pretty easily with relatively low fees and little interference from middlemen.”

For these reasons, Agrawal feels that Bitcoin and cryptocurrency payments are more likely to be useful when buying large items like homes or vehicles than small ones such as the oft-used example of a cup of coffee.

True enough, the last few years have seen more people willing to accept cryptocurrency payments for property. This has led some of the most enterprising brokers to explore how they can make the process as simple and smooth as possible for their clients. Andrew Canter, CEO of real estate firm Canter Companies, explains about his decision to get involved with Bitcoin:

“We realised there is so much new wealth in the crypto space… There are a lot of new buyers and a lot of people that have seen their wealth fluctuate over the last year.”

Being such a new method of payment, some are experiencing various challenges trying to either buy or sell using cryptocurrency. A real estate agent who represented buyers in two deals for properties in Manhattan Beach, LA was one such example. Justin Miller of Beach City Brokers found that established escrow and title companies were anything but accommodating to his requests for information or assistance when he was putting crypto deals together. He recalls his experience:

“No one wanted to deal with bitcoin. They didn’t understand it.”

Meanwhile, Josh Cincinnati of the Zcash Foundation found that he encountered his own challenges when he tried to buy a home in Virginia with cash from cryptocurrency investments. He was told that banks wouldn’t accept the money to approve a loan because they were unsure of its origins. He was requested to prove that the funds were indeed from legitimate trade. In response to this, Cincinnati submitted a detailed account of every transaction he’d made in the last two years. This still wasn’t enough and he was forced to explore alternative methods.

Hopefully, such stories will soon sound as ridiculous to the banks and real estate agents refusing to touch Bitcoin as they do to people in the know.
Mike Michalski of RE/MAX Estate Properties spoke of the simplicity with which crypto can be confirmed as belonging to someone and why some were reluctant to deal with it:

“Proof of funds for a bitcoin sale literally requires the buyer to sit down with a smartphone, open a blockchain app that displays the total value of their bitcoin and show that to the seller… Both the buyer and seller wanted to make the deal happen, but this is all new. There’s just not a lot of understanding or documentation.”

With cryptocurrency providing many of its earliest investors with great wealth, it’s likely that the numbers of those wishing to transact in Bitcoin for real estate will grow. In 2017, there were plenty of examples to suit both ends of the market. The Kalinka Group in Moscow posted one mega-mansion for sale in Bitcoin last September. Meanwhile, a resident of the dilapidated UK seaside town of Grimsby advertised a somewhat more modest home for cryptocurrency.

With stories like that in the LA Times involving a Portuguese citizen who only received interest in his home after updating the listing with a price in cryptocurrency becoming more commonplace, it seems that 2018 will see a continuation of the trend.