MARKET PRICE ANALYSIS ON BTC and ETHThis is given as an insight to a biginner in trading to see and know how to analysis what price is doing in the market, the way the market works and reading of charts.
TERMS USEDHighest High: the highest price formed at some point
EMA: Exponential moving average for directional bias
RSI: relative strength index which measures to what extent the buyers or the sellers are in control of the market, shows the direction the market tends to follow and possibly who is in control of the market either to be buyers (bulls) or sellers (bears)
USD, ETH, USD: are traded instruments and usually comes in pairs (BTC/USD).
BULLS: an animal that attacks by lifting and throwing up
BEARS: an animal that attacks by trying to pull down
CANDLES: a representation on the chart for either a buy or sell in a given time frame depending on the nature the market assumes as it shows whose in control
TREND: the pattern the market assumes either up or down
One of the most critical criterias that determines success in trading and a good trader is in his analysis. Many traders trade based on given signals and sentiments (which is one type of analysis as well) and might seem to succeed you in the short run but then breaks and blows your account in the long run. For this reason, proper analysis is not just based on the chart alone but news, chart/indicator signals and what you see people doing in the market which encompasses the three types of analysis out there being fundamental, technical and sentimental types of analysis.
During the heat of the pandemic, the market experienced a lot of over sold as seen in the drop in price of cryptos in general and as much as many experienced loses, a lot of others who were able to hold a long position experienced some profit as well. Again, the pandemic seem to be resurfacing, causing a lot of discrepancies in the market with traders anticipating for a potential drop as Bitcoins and Altcoins tends to move towards the resistance level signalling a potential change of trend, pushing traders to withdraw from the market, exchange their coins for stable coins such as USDT and USDC to save it's value which is a step in the right direction but then, it also keeps you away from holding positions that could profit you in the long run.
ANALYSISAccording to data from CryptoQuant, the total amount of Bitcoin (BTC) held in exchange reserves dropped from 2.8 million BTC in October 2019 to 2.4 million. This is as an effect of fundamental news on the market as retail traders and whales tend to accumulate coins in anticipation for a potential rise when the change of trend occurs.
Even though Bitcoin is still far below its lifetime highs, if it manages to close Q3 2020 above $10,590, that would be the second-best close in any quarter. Data from Skew shows this would only be behind the Q4 2017 closing price at $13,660.
This could be related to the activities of institutional investors which is advantageous to Bitcoin and themselves as they stand the chance to hold long positions in a trade.
Grayscale Investments currently holds 449,900 Bitcoin, which is over 2% of Bitcoin’s maximum possible supply according to a data from Bybit.
CURRENCY PAIR ANALYSISIn running analysis on a certain pair to determine direction of trend, it's always best to run your analysis on a higher time frame and observe on a lower time frame for changes. Let's see what's happening in the market for the BCT/USD and ETH/USD. These are the top trading pairs available on many exchanges.
BTC/USDUsing the 20-day exponential moving average, Bitcoin has been found to move around the ($10,732) zone for the past few days, forming a channel at that zone. Although the bulls had tried to break away on Sep. 29, they could not sustain the higher levels as a bearish engulfing occured forming a zone of indecision as prices seem to hover within that zone without taking a definite direction in preparation for either continuation or change of trend within a layer of consolidation.
BTC/USD daily chart. Source: TradingViewCombining the 20 EMA, Symmetrical triangle drawn and the movement of the RSI, one can predict the trend direction if the buy or sell candle breaks out of our zone in either direction respectively.
If they succeed, the BTC/USD pair can rally to $12,000 and then to $12,460. Conversely, if the bears sink the price below $10,500 and the uptrend line, a drop to $9,835 is likely.
ETH/USDAs clearly shown through the early months of July, the market continued in a zone of indecision following the equal power between bulls and bears, forming small candles in a zone of consolidation before it started buying by late July 21st and continued through August, making it's highest high in early September before the bears started attempting to stall the relief rally at the 20-day EMA ($361). Then, it ran into a period of up and down movement within that zone. If the price turns down and breaks below $337, Ether (ETH) could drop to $308.392.
ETH/USD daily chart. Source: TradingViewWhen the price fails to rise above the 20-day EMA in a down move, it suggests that the sentiment is negative and the bears are selling on rallies.
Both moving averages are sloping down marginally and the failure of the RSI to rise above the 50 level suggests that bears have the upper hand. A break below the critical $308.392 support could result in a fall to $240.
This negative view will be invalidated if the ETH/USD pair turns up and breaks out of the 20-day EMA. Such a move could result in a rally to $395.
These are actions of news on the market in anticipation for a potential drop in price and a change of trend in the market as seen in the BTC/USD pair and a likely trend continuation in the ETH/USD trading pairs.
Though, I still maintain that, noting the fact that the first face of the pandemic causing a rather fall in price as observed then is most likely not to be the case as at now due to the fact that, the world is better prepared now to tackle the pandemic than before hence, the market though might encounter a little bumpy road is still bound to move smoothly.
Source:
https://cointelegraph.com/news/price-analysis-9-30-btc-eth-xrp-bch-bnb-dot-link-bsv-cro-ada
