Technical Analysis of BTCUSD November 2018

Technical Analysis of BTCUSD November 2018

Introduction

Most cryptocurrencies are highly correlated with Bitcoin being a pacesetter in the space. The top ten cryptocurrencies went north last year with Bitcoin leading the pack with a 630.69% rise compared to a 44.35% risk exposure triggered between the months of August and December last year 2017. This year, however, the pair has been in a downward spiral, as the pair heads in the opposite direction. Read along as we start with the monthly chart and work our way down to the 4-hour chart.

Technical Analysis of BTCUSD November 2018

BTCUSD: Monthly Chart

Technical Analysis of BTCUSD November 2018 Monthly Chart

Bullish and Bearish accumulation patterns are price patterns we consider to be of high probability and do not lag much. Their formation in higher time frames brings about huge volatility in the direction of the pattern formed. Looking at the above BTCUSD, you’ll notice that a double bullish accumulation pattern was formed at the closing price of July and the movement started in August, translating to the percentage rise in the value mentioned in our introduction.

As price reversal patterns begin to show up in the form of double bearish accumulation patterns on the first of March, traders that entered short-selling positions at this point have not yet started making profits, as a fact, they are slightly below breakeven price.

Today October the 31st is the last day of the month of October, and the price is already in a single bearish accumulation pattern. A bearish close of the current month would trigger a double bearish accumulation pattern which is expected to drive Bitcoin price further down by 60% compared to a 17% risk exposure.

BTCUSD: Weekly Chart

Technical Analysis of BTCUSD November 2018 Weekly Chart

Last week closed bearish and hence formed an inside bar candlestick pattern after a sudden volatility spike in the price of BTC and major cryptocurrencies in the space. The bullish spike tripped off a lot of stop-loss orders placed above the bearish accumulation pattern of the weekly chart, an indication that short-term speculators were responding to fundamental releases that coincide with shorter time frame technical setups visible on the 4-hour chart.

BTCUSD: Daily Chart

Technical Analysis of BTCUSD November 2018 Daily Chart

As we mentioned earlier, the daily chart is the domain of short-term speculators. From the above daily chart, we notice the double bullish accumulation pattern that coincided with the release date of the Ethereum Constantinople upgrade. Although it was not a Bitcoin-related news announcement, speculators interpreted it as good news for the cryptocurrency space.

Following the bullish accumulation, the pattern is an opposite breakdown of bullish accumulation that sends the pair spiralling down with a failure of another bullish accumulation pattern. The 14th, 18th and 23rd of October were significant dates for these moves.

BTCUSD: 4-HOUR Chart

Technical Analysis of BTCUSD November 2018 H4 Chart

The 4hour chart is where I consider being the domain of binary options traders, and positions should not be held for too long when we trade on this time horizon, the reason being that the timeframe can be choppy at times. Making reference to the breakdown of the bullish accumulation pattern on the 4hour chart, on October 25, and similar bearish build ups formed earlier 18th October.

BTCUSD: 2-HOUR Chart

Technical Analysis of BTCUSD November 2018 H2 Chart

Another timeframe found really attractive to binary options traders is the above 2-hour chart. Similar to the 4hour chart the trade holding time is short and it displays a breakdown of bullish accumulation patterns on October 18, 21, 23, and 25.

Conclusion and Projection

Following the analysis presented in this post, it’s obvious general direction of the BTCUSD is bearish; however, the risk and reward for the pair are dependent on the time frame of interest and pattern triggered. Bitcoin vs. US Dollar is projected to head towards $3179.00 which is about a 50% price drop compared to a 16% risk exposure.

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