Cryptocurrencies are returning to uptrend and today the Bitcoin recorded another 7% growth to 4,005 USD. Bitcoin was previously trending lower inside a descending channel but has just broken past the resistance to indicate that a reversal is due. The news that Nasdaq will launch futures on Bitcoin in 2019 stimulated the growth of the cryptocurrencies, but the gains were limited by SEC’s warning that wants to see better market surveillance and custody for cryptocurrencies before being “comfortable” with a bitcoin ETF.
However, Bitcoin lost about 40% in November, starting the month at 6,344 USD and currently trading at 4,000 USD. And although the price stabilized at the beginning of the week, recovering above 4,000 USD, the analysts are not so excited. The market’s pessimism about bitcoin’s short-term prospects may continue into the new year.
Bitcoin technical analysis
Bitcoin price on Wednesday upholding healthy gains of 5% in the early part of the session. BTC/USD bulls are attempting to convincingly clear the 4,000 USD territory. Resistance has been seen over the past few sessions around the 4,100 USD mark, a break above will likely invite much buying pressure.
The price of Bitcoin is above the 100 SMA dynamic inflection point as an additional bullish signal. However, the 100 SMA is still below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, the downtrend is more likely to resume than to reverse. Price has yet to test the 200 SMA dynamic inflection point which might also lead to some bearish pressure.
The bullish divergence took place between the price and daily RSI. The bullish divergence resulted in the price continuing to decrease, forming a lower low despite the daily RSI having formed a higher high. This is a typical reversal pattern. Traders were likely cautious to take long positions with this pattern given the extremely bearish market conditions taking place recently.
Price is now starting to trade in a range which may precede another significant move upward. If the next move is substantial and to the upside, a bull flag pattern will be successfully executed on the hourly. Some resistance would be expected around the hourly 200 EMA at 4,200 and also 4,600 if the upward movement can continue.
Ripple technical analysis
The largest altcoin by market cap, Ripple, has been rising with the market and is currently trading around 0.37 USD. After numerous tests of 0.4 USD last week, XRP broke sharply below and continued to trade near 0.3 USD.
With Ripple underperforming on this rise, it is likely following the market direction. If the market leader Bitcoin can continue its upward movements, the Ripple is expected to follow.
Overall, Ripple is likely to follow the direction of the market. If the market leader Bitcoin rises from here, Ripple is likely to follow suit. However, the cryptocurrency is setting up more bearish than its peers and is expected to underperform on rises and more sharply decline if the market falls from here. In the event of a move downward from here, 0.3 USD will be a crucial level to monitor.
The technological exchange Nasdaq plans to launch Bitcoin futures in the first quarter of 2019. Nasdaq is currently discussing this issue with the Commodity Futures Trading Commission (CFTC), the main regulator in the futures and options market. The price of Bitcoin futures on the Nasdaq will be calculated at a spot price from many cryptocurrency exchanges selected by investment management firm VanEck Associates Corp.
Nasdaq is not the first to think about trading cryptocurrency derivatives. In December 2017, Bitcoin futures started trading on the two exchanges in Chicago – Cboe Global Markets and CME Group. The first calculates the price of futures according to the data of only one cryptocurrency exchange, the second – of four. In December, the Chicago stock exchanges had to undergo certification in an accelerated mode, shortly after the launch of the new tools, the cost of Bitcoin reached a record 20,000 USD.
In mid-October 2018, the CME Group reported trading in cryptocurrency futures for the third quarter: the average daily turnover increased by 41% compared to the second quarter — 5,053 contracts.
The crypto community is eagerly awaiting the approval for the first-ever Bitcoin exchange-traded fund (ETF). many analysts expect the approval to help to raise the price of the cryptocurrencies, which sank to a 14-month low during the weekend.
But the man largely behind greenlighting the Bitcoin ETF – Securities and Exchange Commission Chairman Jay Clayton — has a few worries that need to be assuaged before he’s “comfortable” approving the investment vehicle.
The first is a lack of market surveillance. Because most cryptocurrency exchanges don’t use the same monitoring tools as stock exchanges, Clayton said investors may not get a fair assessment of the Bitcoin’s price.
“What investors expect is that trading in the commodity that underlies that ETF makes sense and is free from the risk of manipulation. It’s an issue that needs to be addressed before I would be comfortable”, said Jay Clayton at the Consensus Invest Conference in Manhattan. “Those kinds of safeguards do not exist currently in all of the exchange venues where digital currencies trade”, added he.
On the other hand, the Commissioner on the Securities and Exchange Commission Hester Peirce announced the inevitability of the approval of Bitcoin ETF. According to her, the adoption of a publicly traded Bitcoin fund “is definitely possible in the near future”.