BTCSUSD 1D: Possible Trend Reversal (Intermediate)
I am currently observing the following trend reversal indicators in the short term (in order of relevance):
1. The downward trend established from the June 2019 highs has been broken on stronger than average buying volume (relative to the last few months).
2. The long-term upward trend established in March 2019 has been tested and confirmed.
3. The 200 EMA has crossed the 100 & 50 EMA indicators.
4. Increasing number of consecutive buying days (in terms of volume).
I want to make a point about (2), as I consider (2) to be a risky theory that I have that we are still in a mostly upward trend concerning Bitcoin. This can change for a myriad of reasons, which is why I am completely out if we fall under that on strong levels of volume. Government regulations are increasing all over the world, the implications of which can affect the liquidity and volume significantly. Many exchanges have gone down over the last few years, as well as many smaller mining companies. This only serves to concentrate the liquidity of Bitcoin and results in greater price variance with lower volumes of trading.
In addition, we have the halving arriving in May of this year, which will further reduce additional liquidity into the market. Unless the price of Bitcoin rises in proportion to the reduction of this additional rate of liquidity, we will see even more mining companies topple as they run out of cash to support the reduced rate of revenue. This will affect the markets in many ways, but I believe the most significant one is that prices are now controlled by even fewer hands which results in greater price variances over shorter time frames.
Happy trading!
1. The downward trend established from the June 2019 highs has been broken on stronger than average buying volume (relative to the last few months).
2. The long-term upward trend established in March 2019 has been tested and confirmed.
3. The 200 EMA has crossed the 100 & 50 EMA indicators.
4. Increasing number of consecutive buying days (in terms of volume).
I want to make a point about (2), as I consider (2) to be a risky theory that I have that we are still in a mostly upward trend concerning Bitcoin. This can change for a myriad of reasons, which is why I am completely out if we fall under that on strong levels of volume. Government regulations are increasing all over the world, the implications of which can affect the liquidity and volume significantly. Many exchanges have gone down over the last few years, as well as many smaller mining companies. This only serves to concentrate the liquidity of Bitcoin and results in greater price variance with lower volumes of trading.
In addition, we have the halving arriving in May of this year, which will further reduce additional liquidity into the market. Unless the price of Bitcoin rises in proportion to the reduction of this additional rate of liquidity, we will see even more mining companies topple as they run out of cash to support the reduced rate of revenue. This will affect the markets in many ways, but I believe the most significant one is that prices are now controlled by even fewer hands which results in greater price variances over shorter time frames.
Happy trading!
4 hour chart showing the increased buying density.