BY CNA team - August 9, 2018
Bitcoin to test 2018 lows in coming weeks
August is definitely turning out to be the bloodiest month this year for the cryptocurrency markets with some US$9bil lost over the past 24 hours and US$50bil in the past two weeks.
On a technical basis, an analyst says crucial support for a bull run was broken when the US$6,800 level for bitcoin was cracked.
“We now expect over the course of the next two weeks for bitcoin to test 2018 lows between US$5,700 to US$5,900,” he says.
“In terms of analysing the state of crypto markets, our team is taking an entirely bearish mindset into action,” he adds, suggesting a move into net short or heavily hedged positions as better buying opportunities may arise in coming weeks.
At press time, bitcoin had dipped 5.15% over a 24-hour period to US$6,332.21, rebounding from earlier lows of US$6,226.22, according to CoinMarketCap data.
The rest of the market was weighed down by bitcoin’s price drop. Ethereum fell 5.34% to US$358.98 over the same period, XRP slipped 9.05% to 33.75 US cents, bitcoin cash down 9.41% to US$590.53 and EOS lost 13.72% to US$5.61.
While market volatility has put off many and side-lined others, another analyst says there are opportunities to go long on bitcoin.
“I would say go long, I’m not aiming for US$20,000, just US$8,000,” he says, referring to bitcoin prices.
He expects bitcoin prices to rebound on Aug 9 and is watching how the cryptocurrency will close in the coming weekend.
He says the one-day relative strength index (RSI) for bitcoin, which indicates overbought or oversold positions, will improve on Aug 9. “For prices to go lower, there needs to be a small run-up first,” he adds.
However, he cautioned that the US$6,800 level will be a tough resistance level to break for now. “If there’s a rebound, I suggest going short for optimal risk-reward,” he says.
News reports say market sentiment took a hit after the US Securities and Exchange Commission postponed to Sept 30 a decision on the proposed rule change brought by Cboe BZX Exchange for the listing of the SolidX exchange traded fund.