Bitcoin Market Turns Indecisive After Price Rally Stalls Around $10.6K

Omkar Godbole
Sep 5, 2019 at 11:00 UTC
Updated Sep 5, 2019 at 14:13 UTC
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  • Bitcoin created a “spinning-top” candle on Wednesday, pouring cold water over the optimism generated by the triangle breakout witnessed earlier this week.
  • The spinning top has made today’s UTC close pivotal. A close above Wednesday’s high of $10,834 is needed for the continuation of the recent rally.
  • A UTC close below the spinning top’s low of $10,378 would shift risk in favor of deeper losses below $10,000.
  • A bearish daily close shouldn’t be ruled out, as the spinning top represents buyer exhaustion.

The bitcoin (BTC) market is looking indecisive, after witnessing a solid two-way business in the last 24 hours. Today’s UTC close will likely determine the next move.

The top cryptocurrency by market value picked up a bid at lows below $10,400 around 13:45 UTC on Wednesday and rose above $10,800 at 20:00 UTC, according to Bitstamp data.

Tuesday’s high-volume move had set the tone for a test of the bearish lower high of $10,956, as discussed yesterday.

The bullish move, however, ran out of steam at a 15-day high of $10,834 in the U.S. trading hours yesterday and prices fell back at the UTC close at $10,586 – down just $0.30 percent on the day.

Essentially, BTC created a spinning-top candle on Wednesday, which comprises of a small body, representing marginal gains or losses on the day and long wicks, representing two-way price action.

The spinning top is widely considered a sign of indecision in the market place – with neither bulls nor bears being in a commanding position.

In such situations, experienced traders often wait on the sidelines till a strong directional move emerges. So far, BTC has not shown any signs of directional strength – the cryptocurrency is consolidating around $10,600 on Bitstamp.

Daily chart

The spinning-top candle has taken the shine off the triangle breakout witnessed earlier this week and has made today’s UTC close pivotal.

A close above the candle’s high of $10,834 would imply a continuation of the rally from the recent low of $9,320.

A more reliable indicator of bullish revival would be a UTC close above the lower high of $10,956 created on Aug. 20. A bullish close above $10,956, if confirmed, would open the doors to $12,000.

Meanwhile, a close below the spinning top’s low of $10,378 would indicate that the rally from the recent low of $9,320 has ended and the bears have regained control. That could yield a sell-off back to $9,755 (Aug. 22 low).

With the moving average convergence divergence (MACD) histogram reporting bullish conditions (an above-50 reading), observers may feel tempted to predict a bullish daily close.

However, it may be foolish to rule out a bearish close, as the spinning top candle has appeared following a $1,500 rally, and the indecision predominantly represents bullish exhaustion. If the bulls were strong, the spinning top would not have appeared. Hence, a correction could be around the corner.

BTC is also looking heavy on the intraday charts.

Hourly chart

BTC has found acceptance below the bullish trendline, having faced rejection around $10,800 twice in the last 48 hours.

More importantly, a falling channel breakout seen yesterday failed to accelerate the preceding bullish move – a sign of bullish exhaustion. The 50-hour moving average is also beginning to top out (shed bullish bias).

As a result, a pullback to the 100-hour MA, currently at $10,247 cannot be ruled out.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Split arrows image via Shutterstock; charts by Trading View

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This article is intended as a news item to inform our readers of various events and developments that affect, or that might in the future affect, the value of the cryptocurrency described above. The information contained herein is not intended to provide, and it does not provide, sufficient information to form the basis for an investment decision, and you should not rely on this information for that purpose. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.