SHIB’s 30% gain initiates a bullish reversal pattern and rumors of a major exchange listing and other developments have investors playing catch with the canine-themed meme coin.
Tag: Falling Wedge
Ethereum price soars above $3K into ‘red zone’ triggering sell-off fears
Ethereum’s native asset Ether (ETH) crossed above $3,000 in an extended upside rally on Aug. 7, hitting a three-month high. Nevertheless, the cryptocurrency’s incredible move upside also boosted its possibilities of facing a bearish backlash.
An on-chain indicator that tracks the total percent of Ethereum addresses in profits predicted the said downside outlook. In detail, the so-called “Ethereum: Percent of Addresses in Profits” indicator by Glassnode reached 96.4% amid the ETH/USD price rally.
Lex Moskovski, chief investment officer at Moskovski Capital, highlighted the metric’s capability of predicting Ethereum top. In hindsight, whenever the Glassnode indicator crossed the 90%-threshold, it resulted in profit-taking among Ether investors.
“We are back to the red zone, historically associated with local tops,” said Moskovski as he referred to the Glassnode chart above. Nonetheless, he added that the price might stay near its current highs—above $3,000—for a while.
Supply squeeze meets HOLDing sentiment
Moskovski’s outlook pointed at traders’ intention to hold Ether, majorly due to the euphoria surrounding a software upgrade that has added deflationary pressure to ETH.
The optimism around the London hard fork stems from the increasing scarcity that should make this digital asset more valuable in the long run, specifically against a booming demand.
The London upgrade will divide almost 13,000 new Ether tokens issued to pay for miners’ gas fees into three parts. One of them is the base fee that users pay to conduct ETH transactions, which the upgraded Ethereum protocol will now burn.
2. Before the upgrade, miner fees accounted for approximately 30.68% of the total earnings (this is the average data for the 7 days before the upgrade).
— Poolin (@officialpoolin) August 6, 2021
In addition, Ethereum’s ongoing transition from an energy-intensive proof-of-stake mechanism to a faster and cheaper proof-of-stake (PoS) also reduces active Ether supply out of the market.
In detail, the PoS mechanism prompts network operators to deposit 32 ETH into a smart contract as a stake to run the blockchain. In return, the protocol rewards depositors with annual yields.
Moskovski hinted that traders could find holding Ether more appealing than secure interim profits as ETH/USD now trades 79.82% above its July 20 bottom of $1,718. Nonetheless, technical indicators also pointed at higher sell-off probabilities in the short-term.
That RSI
Ether’s latest run-up above $3,000 also pushed its daily relative strength index (RSI) into an overbought area.
RSI enables traders to measure an asset’s trend momentum to evaluate its overbought and oversold condition. In simple terms, traders interpret a reading above 70 as overbought—a cue to sell the asset. Conversely, an RSI below 30 poses buying opportunity due to the asset’s oversold conditions.
Related: Ethereum eyes 3-week winning streak vs. Bitcoin as BTC price drifts below $39K
Ether’s daily RSI reading currently sits near 79, as shown in the chart below.
Meanwhile, a falling wedge breakout setup brewing on the daily ETH chart envisions its profit target near $3,250. Falling Wedge breakouts typically last by as much as the total height between the Wedge’s upper and lower trendline.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Ethereum eyes rally to $3K with 39% ETH price rebound triggering a classic bullish pattern
The price of Ether (ETH) jumped to a three-week high on July 26, triggered by similar gains in the Bitcoin (BTC) market that appeared in the wake of rumors about Amazon’s foray into the cryptocurrency sector.
A job posting from the retail giant showed that it is seeking an executive to build its “digital currency and blockchain strategy.” Meanwhile, global media reports speculated based on inside sources that Amazon would start accepting Bitcoin as payments. As a result, the BTC/USD exchange rate surged to its six-week high after the news.
Ether, whose 30-day correlation with Bitcoin stands at 88%, surged likewise on Amazon’s crypto integration rumor. On Monday, the ETH/USD exchange rate soared to an intraday high of $2,390, reaching its highest level since July 8. The pair was up more than 6.7% as of 12:20 GMT.
However, measuring from its previous bottom of $1,720 on July 20, the net upside rebound came out to be 38.94%. The retracement looked strikingly similar to the bullish price action between June 22 and July 7, wherein ETH/USD rebounded by more than 40% after bottoming out at $1,700.
That said, the Ethereum token bottomed out twice near the $1,700 range before rebounding higher by 38-40%. Analyst Jonny Moe spotted that mirrored retracement moves and ruled them out as a Double Bottom pattern.
The bullish setup
In detail, double bottoms are bullish trend reversal patterns, consisting of two troughs around the same level, hanging by a neckline resistance. As it plays out, the price eventually flips the neckline resistance as support and rallies higher by as much as the maximum pattern’s height.
Ether fits the description. It has formed two consecutive bottom levels at around $1,700. Meanwhile, its neckline resistance is near $2,390. Therefore, the maximum pattern’s height is $690.
Should the ETH/USD rate break above $2,390-neckline resistance, accompanied by a spike in volume, the pair will expect to extend its upside move by approximately $690. That would roughly take it towards $3,000 (with $2,948 serving as a psychological bullish target based on historical price action).
Confluence
Another technical pattern in play outdoes the Double Bottom setup’s upside target by predicting Ether prices at near $3,250.
Related: Ethereum bounces but ETH price in danger of turning $2.3K into new resistance
Dubbed as Falling Wedge, the pattern develops when the price trades lower inside a range that begins wide but contracts during the downtrend. It eventually prompts the price to break bullish while setting up its profit target at a level situated typically as above the Wedge height (if measured from the breakout point).
So it appears, the ETH/USD exchange rate is undergoing a bullish breakout, confirmed by a high-volumed close above the Wedge resistance trendline. The profit-taking target for the current setup is $1,208 above the breakout level, which puts the price en route to $3,257.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
16% Ethereum price rebound activates a classic bullish pattern — $2.5K next?
Ethereum’s native crypto Ether (ETH) rebounded sharply on Thursday after Elon Musk disclosed for the first time that his private rocket firm SpaceX holds Bitcoin (BTC), and Tesla would probably resuming the bitcoin payment option for its electric cars.
The BTC/USD exchange rate was below $30,000 but bounced by more than 5% after the big reveal, touching an intraday high of $32,895. Ether, which tends to move in lockstep with the flagship cryptocurrency, surged likewise.
It reclaimed $2,000 on Wednesday, rising by as much as 18.20% from its week-to-date low of $1,720.
Lukas Enzersdorfer-Konrad, chief product officer at financial services company Bitpanda, told Cointelegraph in an email statement that Ethereum would continue tailing Bitcoin in the coming sessions.
“As soon as the “big brother” finds its support level,” he added, “Ethereum will most likely follow suit.”
Classic pattern sets $2.5K target for Ethereum
The latest bounce in the Ethereum market also originated from a support level that had earlier capped Ether’s downside attempts.
Independent market analyst, known by the pseudonym Rekt Capital, flashed a so-called “orange area” on a weekly ETH/USD chart, illustrating three bearish wicks and their ability to shied the pair from falling lower.
“ETH has rallied +16% since rebounding from the orange area,” the analyst explained, coupling the price floor with a support trendline that apprehensively constituted a Falling Wedge.
In detail, Falling Wedges are bullish reversal patterns that start wide at the top but start contracting as the prices move lower, forming a sequence of lower highs and lower lows. A bullish confirmation comes when the price breaks above the Wedge’s upper trendline with a spike in volumes.
In doing so, bulls place their upside profit target as up as the maximum wedge height.
Ether prices almost check all the boxes when it comes to trading inside a Falling Wedge pattern. Rekt Capital highlighted the same in a chart he published Thursday.
“As long as ETH holds the bottom of the structure as support until the end of the week, [it] will confirm a return to the structure after briefly losing it earlier this week,” added Rekt Capital.
The maximum distance between the Wedge’s upper and lower trendline is roughly $850. Therefore, according to the classic technical setup, a breakout above the upper trendline could send the prices to at least $2,500.
Related: Decoupling ahead? Bitcoin and Ethereum may finally snap their 36-month correlation
Nonetheless, the prices still risk falling sharply below $2,000 based on a short-term technical setup, as shown in the chart below.
The daily Ethereum chart shows price could fluctuate between $1,850-2,080 before the potential bullish breakout, noted Rekt Capital.
Kirkpatrick and Dalquist’s book titled “Technical Analysis” notes that falling wedges have a failure rate of just 8% to 11%. Moreover, the possibility of a bearish breakout has a higher failure rate of 15% to 24%.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Are KuCoin Shares overvalued after KCS price gains 100% in one month?
KuCoin (KCS) prices ticked up in the early Wednesday session on July 7, in part because of an ongoing market rally across the top exchange-based utility tokens.
The 72nd-largest cryptocurrency peaked for the day at $14.847 before correcting lower on interim profit-taking sentiment. The move downside accompanied decent volumes, alerting that the sell-off momentum could continue across the European and the U.S. sessions.
At the time of writing, the KCS/USDT exchange rate was approximately $14, up more than 100% on a month-to-date timeframe (MTD).
Therefore, KuCoin’s bearish correction appeared as an attempt to neutralize its overextended upside momentum. The cryptocurrency’s relative strength index (RSI) on one-day charts popped above 70 following its latest price spikes, a reading that technical terms the underlying asset as “overbought.”
The RSI continues to float above 70, alerting about KuCoin interim downside risks before it attempts to break above the technical resistance around $15 (as shown in the chart above).
Bullish setup
Conversely, the price breaking out of a descending channel range to the upside raised its prospects of extending the bullish move further higher. As the charts below illustrate, KCS trended lower while fluctuating inside a falling range—this pattern appears like a Falling Wedge
Falling Wedges are bullish reversal patterns. They come into the picture when an asset’s price action forms a conical shape while sloping down and forming at least two reaction highs and lows. Adjusting the KCS/USDT’s lower trendline move makes a similar descending structure.
Falling Wedge breakouts are technically skewed to the upside. Therefore, KuCoin’s latest resistance break, coupled with a spike in volumes, can be called a bullish breakout, with its profit target lurking near $19.751 (situated as far as the maximum Wedge height).
Fundamentals
KCS’s upside move, on the whole, appeared as a part of an overall price rebound across the exchange token markets.
Nonetheless, KCS markets showed strikingly lesser volumes in the previous 24 hours compared to its exchange-token rivals. For instance, the second-to-worst volume logged by an exchange token was roughly $620,000 (see Unus Sed Leo in the chart above). On the other hand, KuCoin’s 24-hour adjusted volume was $63,531.
Thin volumes mean that there were fewer numbers of KCS tokens trading. In turn, there was a lower KCS liquidity across the markets. As a result, an asset’s price volatility rises in a low volume market and makes it susceptible to the wilder upside and downside moves.
The popular analogy serves as additional headwinds for KuCoin bulls as they attempt to claim the Falling Wedge’s profit target.
KuCoin Shares, or KCS, serves as a utility token on the KuCoin exchange. The platform uses KCS to reward users for using its services, similar to how Binance deploys BNB as a measure to offer users discounts on trading fees. Holders of KCS, meanwhile, also receive a daily dividend, i.e., a KuCoin bonus, which equals 50% of the trading fees on the exchange.
As KuCoin moves to become a fully decentralized platform, it plans to use KCS for transaction fees. The exchange also intends to buy back and destroy half of KCS’s 100 million supply cap. The funds to facilitate the buyback, again, comes from KuCoin’s trading fees.
VORTECS™ data from Cointelegraph Markets Pro also began to detect a bullish outlook for KuCoin Shares price hours ahead of the July 7 rally.
The VORTECS™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historic and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.
As seen in the chart above, the VORTECS™ Score flashed green on July 6, 21:55 UTC, with a score of 65 with the price continuing to climb higher above $11.27. KuCoin-related tweet volume queries also surged by 1,246.31% over the past 24 hours.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Buy or hodl, says investor Raoul Pal as Bitcoin price chart hints at ‘falling wedge’
Raoul Pal wants Bitcoin (BTC) investors to mobilize their trades against Elon Musk. The macro investment strategist advised traders to either accumulate or preserve their Bitcoin holdings just as the flagship cryptocurrency suffered massive declines over the weekend and at the beginning of this week.
In retrospect, bulls came under pressure after Elon Musk started rattling the cryptocurrency market. On May 12, the billionaire entrepreneur reversed his company Tesla’s decision to accept bitcoin payments for its electric vehicles, citing environmental issues related to the bitcoin mining industry.
Nevertheless, he noted that Tesla would keep holding more than a billion-dollar worth of bitcoins on its balance sheet. The company had revealed the said crypto investment in its securities filing in February 2021.
But during the weekend, Musk hinted at another U-turn. He engaged with an alleged cryptocurrency scammer on Twitter when the latter discussed the prospect of Tesla dumping its entire $1.5 billion Bitcoin stash on the market. Musk responded with an “indeed,” prompting traders to believe that he would indeed sell all the Tesla’s Bitcoin holdings.
Musk later clarified that Tesla has not sold its Bitcoin.
But the damage was done. As the Bitcoin’s price fell, Musk’s comments lead to an out-and-out Twitter spat with the bitcoin community, prompting prominent crypto influencer Anthony “Pomp” Pompliano to call the Tesla CEO an “emotional billionaire.”
We were anticipating nation states and central banks, but instead got an emotional billionaire with a Twitter account.
— Pomp (@APompliano) May 16, 2021
On the other hand, Pal suggested Bitcoin traders ignore the “weekend FUD” and focus on the cryptocurrency’s strong technical setup that indicates a bullish breakout.
Pal:
“After the weekend FUD fest and s**t fighting, let’s get back to the important stuff. BTC is forming a wedge most likely…perfectly normal correction and healthy […] So, if you have dry powder, add. If you don’t. HODL.”
Anatomy of Pal’s Bitcoin Tweet
BTFD is a backronym for “Buy the F***ing Dip” — which influences traders to accumulate more assets as their prices go down. Meanwhile, Pal appeared very bullish on the latest Bitcoin correction after spotting a Falling Wedge pattern.
Falling Wedges are bullish reversal patterns. They appear when price trends lower inside a range defined by two downward sloping trendlines — as the reaction highs and reaction lows forming on them converge.
It typically leads to the price breaking above the upper trendline by the maximum Wedge length. The technical theory serves as the basis of Pal’s bullish bias on Bitcoin.
A mirrored image of Pal’s BTC trade setup from Tradingview shows that the BTC/USD exchange rate could rise by almost $14,000 on the next upside breakout move.
Meanwhile, fundamentals such as network hash rate and other metrics continue to flash bullish in the Bitcoin market. However, some macroeconomic factors may also provide a boost for Bitcoin, particularly as the dollar slumps.
Additionally, the Federal Reserve will release the minutes of its meeting in April on Wednesday, suggesting that the central bank will keep interest rates near zero, purchasing government bonds and mortgage-backed securities at the pace of $120 billion per month — at least until 2023.
“We expect the minutes … to reiterate that policymakers consider the pick up in inflation to be transitory,” commented Kim Mundy, a currency strategist at the Commonwealth Bank of Australia in Sydney. Mundy also told Reuters:
“The upshot is that we do not expect the (Fed) to consider tapering its asset purchases soon. The dollar is expected to resume its downtrend this week after last week’s CPI-inspired boost.”