Technical analysis

Crucial week for Bitcoin, trying to hold $6500

Julien Moretto – 18 Dec 2019

Another difficult week for the cryptocurrecy market. Within a strong correction that has been going on for 6 months now, Bitcoin is loosing 8% over the last seven days, falling back to the €6,000 ($6,600) level. This level, already tested on November 25, seems to be about to break this time, with the risk of going at lower levels around €5,500 ($6,000). The main altcoins such as Ethereum and Ripple (XRP) also have significant losses, exceeding 15% over the past week. Only Tezos (XTZ) and Cosmos (ATOM) are performing in the top 50 of the market. In this bear market, what are the price levels or technical signals that could cause a bounce and then, possibly, a trend reversal ? Here is our market analysis.

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  • According to CoinGecko, market capitalisation is down again this week, to $155 billion from 177 billion last week.
  • The Bitcoin dominance rises to 67.8%.
  • Tezos (XTZ) continues to perform well, and remains stable this week, against the market trend. On the other hand, the situation is becoming more and more difficult for Ripple (XRP) who is losing 20% this week and is breaking the $0.20 critical support.
  • Twitter CEO Jack Dorsey wants to decentralise social networks and says he has already recruited a team of engineers.

We invite you to discover our complete analysis in video (in french and dated from December 17):

Bitcoin (BTC)

Coinhouse recommendation: 
Wait

  • We didn’t get our buy signal last week, which was a break above the €7,100 ($7,900) level. On the contrary, the Bitcoin price just broke the support level of €6,400 ($7,100) and the €5,900 ($6,500) level that had caused a bounce on November 25 is about to break.
  • We keep waiting this week on Bitcoin. The market situation is too bad to try to buy around €5,900 ($6,500) without technical signals. But if the price bounces again, then forms higher lows and higher highs ont the daily timeframe, then we will take another look at the situation. In the meantime, the buy signal remains a bullish break of the €7,100 ($7,900) resistance with volumes.
  • In terms of technical signals, we can monitor momentum oscillators such as the RSI and see if they form a “W” shape with a bullish divergence (see video for a concrete illustration of this technical signal). This would then be a more anticipated buy signal.
  • It is also important to keep in mind a possible extension of this current downtren. A confirmed break of the €5,900 ($6,500) support would lead to a drop of the price in the €5,500 ($6,000) area, or even lower, at the level of the 200-week moving average, currently located between $5,000 and $5,500.

Ethereum (ETH)

Coinhouse recommendation: 
Wait

  • Very difficult week for Ethereum: -15%, at €110€ ($122) on December 18.
  • The good fundamental news about Ethereum still have no impact on the price. Without technical signals of a bullish reversal, we keep waiting. Same as for Bitcoin: only technical signals like a bullish divergence on the RSI can lead us to reevaluate the siutation.
  • In the meantime, our potential buy signal remains a bullish break of €160 ($180) with volumes.
  • If the downtrend continues on Ethereum, the price could probably return to its January 2019 lows, around €95 ($104).

Tezos (XTZ)

Coinhouse recommendation: 
Taking profits

  • Tezos (XTZ) had a stable week, gaining 3,5%, but falling back around €1.35 ($1.50), against the trend of the rest of the market which is in the red.
  • We believe that the time has come for some profit taking on Tezos, which has risen sharply in recent times and should mark a break while the global market trend is quite bearish. The fact that the price has fallen below €1.50 ($1.60) also indicates a probable pause in the price increase.
  • An interesting zone for some rebuy is the €1.20 ($1.30) pivot, but the chart has to stabilize on it and to show technical signals of reversals ( RSI divergence or peak of volume).
  • If the price makes a daily closebelow €1.20 ($1.30), it will be a sell signal indicating the installation of a wider range on Tezos.

Top & flops of the week (top 50 marketcap)


Tops

1- Cosmos (ATOM) : +8,4%
2- Crypto.com coin (CRO) : +5,6%
3- Tezos (XTZ) : +3,5%


Flops

1- VeChain (VET): -24%
2- Chainlink (LINK) : -23%
3- IOTA : -23%

Hot crypto news

  • The mining industry is increasingly centralized.
    65% of new blocks are now discovered in China.
    54% of the total power is located in Sichuan, a region of China where hydroelectric power is easily accessible.
    Despite everything, companies are still diverse enough not to risk a 51% attack.
  • Twitter CEO Jack Dorsey wants to decentralize social networks.
    He explains that he has already recruited a team of five full-time engineers to work on a standard for decentralized social networks.
  • Jack is also a tough defendant of Bitcoin, which he considers to be the only legitimate monetary protocol of the Internet.
  • Nike has obtained a patent to tokenize shoes on the Ethereum blockchain.
    The idea is to create unique identities for some of its products in the form of non-fungible tokens, also know as ERC-721.
    This will allow holders to prove the authenticity of their product, which can reduce fraud in particular.
    It will also give governance rights to the token holder who will be able to make decisions on the products derived from his model.

Investors’ attention is drawn to the fact that the content of the articles does not constitute investment or financial advice.
Investing in cryptocurrencies involves a risk of total capital loss.
For more information, please do not hesitate to contact our support department.

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