Fresh off all-time highs, bitcoin is trading sideways and showing signs of bull exhaustion.
As per CoinDesk’s Bitcoin Price Index (BPI), the world’s largest cryptocurrency by market capitalization is trading at roughly $16,850. But despite the high price, according to data source CoinMarketCap, BTC has only gained a meager 0.70 percent in value in the last 24 hours, a slight move that contrasts with a stellar performance for alternative currencies.
For example, XRP, the cryptocurrency that powers the Ripple network, is up 67 percent on the day, while ether is up 25 percent and looking higher.
As noted yesterday, the stellar performance of ether, litecoin and other alternative currencies could attract new buyers, thus capping the upside in BTC. Also, comments on social media indicate investors are expecting sideways action followed by a drop after the bitcoin futures listing by the CME Group this Sunday.
As such, the price chart analysis indicates the move to $20,000 could take more time than previously thought.
- The above chart shows short-term bullish momentum could be fading.
- A bearish doji reversal (marked by a circle) indicates the rally from the Dec. 10 low of $13,500 could have run out of steam.
- Also, BTC has breached the ascending trend line (blue dotted line).
The bearish doji reversal and the breach of the ascending trend line have neutralized the immediate outlook.
Bullish scenario: A move above $18,149 (yesterday’s high) would negate the bearish doji reversal and open doors for a rally to $19,697 (Dec. 7 high) and $20,000 (bull flag breakout target).
Note that the bigger rising trend line is still intact. Further, the relative strength index on the 4-hour chart indicates a potential for another leg higher in BTC. So the upside is still in play and a break above $18,149 would reinforce the bullish view.
Bearish scenario: A break below $16,750 (doji candle low) would add credence to the breach of the ascending trend line and the doji reversal. In such a case, BTC could test support at 15,400 (confluence of upward sloping 50-MA and rising trend line).
On a larger scheme of things, only a daily close (as per UTC) below $14,000 would abort the bullish view.