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Wall Street is starting to see the weakness in Bitcoin charts
(Bloomberg) – Bitcoin has not recovered from the inexplicable Saturday of the weekend, and now the investing public is in danger of the next move of the notable volatile symbol. Introduce that “a chart is a chart is a chart,” Tallbacken Capital Advisors’ Michael Purves – weighing crypto for the first time – sent a note Wednesday with a technical analysis of currency trading patterns. Bitcoin’s latest highs have not been confirmed, among other things, by its relative strength index, and the upward momentum is fading, he said. “From a purely technical perspective, the case of the climb seems extremely contested here in the near term”, after its recent update. rally, wrote Purves, the company’s chief executive. Purves’ decision to comment is the latest sign that Bitcoin has become too big for Wall Street to ignore. As more companies allow customers to deal with the asset and more institutional money is tied to its performance, chart observers are capitulating and now lending their expertise to a growing series of analyzes. Earlier, JPMorgan Chase & Co. strategists, led by Nikolaos Panigirtzoglou, noted that several times they witnessed such a negative price action in Bitcoin, buyers returned in time to prevent further declines. This time, they are worried. If the largest cryptocurrency is not able to return soon over $ 60,000, momentum signals will collapse, strategists wrote in a note on Tuesday. Traders, including commodity trading advisors (CTAs) and cryptocurrencies, have likely been at least partially behind the accumulation of long Bitcoin futures in recent weeks, as well as easing in the past few days, they said. “In recent days, Bitcoin futures markets have experienced a steep liquidation similar to mid-February, mid-January or late November,” the strategists said. “Impulse signals will naturally decay from here for a few months, given their still high level.” In these three previous instances, the overall momentum of the flow was strong enough to allow Bitcoin to quickly break above key thresholds, producing other accumulations in the position of momentum traders, JPMorgan noted. “Whether we see a repetition of those previous episodes in the current situation remains to be seen,” said strategists. The likelihood of this happening again seems lower, as the decline in momentum seems more advanced and therefore more difficult to reverse, they added. Flows in Bitcoin funds also appear weak, they said. Bitcoin rose to $ 64,870 during Coinbase Global Inc.’s Nasdaq listing, but retreated to $ 55,000. The cryptocurrency is still growing by about 90% so far. The currency, declining in five of the last six sessions, is struggling to surpass the 50-day moving average around $ 56,810. For many charts, this is a downward indicator as it tends to determine price momentum trends. If Bitcoin could not break its short-term trend line, it could move lower and test the $ 50,000 level, down about 10% from where it is currently trading. The next support area would be its 100-day moving average around $ 49,208. That would mean an 11% retreat from Wednesday’s trading levels. Tallbacken’s Purves, which says the 2017 currency crash and subsequent decline is a useful case study, also points to Bitcoin’s daily MACD signal – or the moving average convergence indicator of divergence – that has become bearish in the medium term. And its performance is still correlated with Cathie Wood’s popular and popular ARK Innovation ETF. “Trading on the bullish side right now doesn’t have a favorable risk reward, and if you’ve made a profit, it seems like a good time to go for it at the moment,” Purves wrote. “While the upward pace seems clearly challenged here, it is inconclusive how much the risk of disadvantage remains,” he wrote. “It is entirely possible that Bitcoin will consolidate over a period of time. ” Bitcoin fell 3.2% to $ 54,996 on Wednesday, with smaller and alternative currencies that have been depleted in recent days also falling, with Dogecoin – the child’s poster for taking cryptocurrency risks – down about 15% for trading around 31 cents.This fell from a high of 42 cents the day before, according to CoinMarketCap.com For more articles like this, please visit us at bloomberg.com now to stay ahead with the most reliable business news source. © 2021 Bloomberg LP