Bitcoin has come under pressure today amid sharp gains in alternative currencies, but the charts are showing no signs of panic.
Having clocked a high of $15,394.99 at 02:14 UTC today, CoinDesk’s Bitcoin Price Index fell to an intraday low of $14,225.17 at 09:14 UTC. At press time, bitcoin was trading at $14,500 levels. Quite clearly, the 2 percent depreciation in the value shown by data source CoinMarketCap is largely due to the decline seen between 02:14 UTC and 09:14 UTC.
Meanwhile, cheaper alternative currencies are strongly bid. For instance, Ripple’s XRP token has set a new all-time high of $3, having appreciated by a hefty 31.63 percent in the last 24 hours. Furthermore, prices of cardano (ADA) and stellar have jumped at least 20 percent each, while NEM (XEM) has appreciated by 46 percent.
An argument could be put forward that investors are using the BTC to accumulate alternative currencies, given the sharp gains in the XRP/BTC, ADA/BTC and XEM/BTC pairs.
Amid what some are calling an “altcoin bubble,” it remains to be seen whether money will pour back into BTC once the valuations of the alternative currencies start to look overstretched.
Currently, the charts suggest BTC is down but not out and is holding onto bullish territory.
Bitcoin chart (prices as per Coinbase)
As discussed yesterday, the outlook remains bullish as long as prices hold above $12,701.55 (50 percent Fibonacci retracement).
Also, the drop from the intraday high of $15,400 seems to have come to a halt around the upward sloping 5-day moving average at $14,352. Further, the 50-day MA is sloping upwards in favor of the bulls. The chart also shows upside (bullish) break of the falling wedge.
The above chart (prices as per Coinbase) shows:
- BTC has breached the falling trend line and has established higher lows, indicating scope for an upside move.
- An inverse head and shoulders pattern with neckline hurdle at $15,500.
- The short-term outlook remains bullish. A break above $15,500 (neckline resistance) would open doors for a return to $18,500 (inverse head and shoulders breakout target as per the measured height method).
- On the downside, support is seen at $13,500 and $12,701.55. Only a close (as per UTC) below $12,701.55 would signal a bullish-to-bearish trend change.
Chess image via Shutterstock
Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.