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Bitcoin to USD ( BTCUSD ) Forecast & Weekly Analysis, July 19 2018

Weekly Crypto Forecast & Analysis for BTCUSD

Introduction

Starting from early this year, Bitcoin the cryptocurrency giant has been in a downward trend, causing a domino effect on every other alt-coins. Last week was another depressing one for the crypto enthusiasts and newbies who bought into last year’s Bull Run. This, however, brings some light of hope for investors holding on to their private keys, with hopes of selling at a high price. Can the current upward move be sustained? Read on as we look into the possibilities of this happening.

Speculative Demand

In the news this week is a buzz on the massive adoption for the blockchain technology, from the U.K, China, Korea etc. to Technology and aerospace giants such as Oracle, Accenture, and Thales. Though the blockchain is a technology that can stand on its own, the current buzz creates sentiments towards the speculative demand for Bitcoin.

The Japanese firm, SBI has opened its crypto exchange to traders after conforming to strict regulations. Though account opening is only to residents of Japan between the ages of 20 to 70years, this does not rule out the fact that it buffers speculative demand and regulatory adoption altogether.

Regulatory and Security Adoption

As a way of monitoring crypto-assets via a framework, the Financial Stability Board published a report on FSB.org website. This report was presented to FSB’s Central Bank Governors and Finance Ministers of the G20. The FSB has been collaborating with the Committee on Payments and Market Infrastructure (CPMI) to develop this framework for overseeing crypto markets. 

Earlier in May, the IMF mentioned that crypto-assets do not constitute financial stability risks, however, in their Global Financial Stability Report, they highlighted that not having appropriate safeguards in place, could make cryptocurrencies a risk to global economies.

Also this week, Coinbase, a cryptocurrency exchange, which could also be seen as a Bitcoin broker and wallet service provider, recently received approval from the United States (SEC) and FIRA to list digital currencies as securities in a Bloomberg report.

Technical Analysis

As with other currency pairs we’ve been analyzing on this series, we’ll be carrying out a top-down approach towards the BTCUSD pair. Using this approach in our analysis helps avoid being cornered in local minima in terms of lower time-frames.

BTCUSD: Monthly Chart

Bitcoin to USD Forecast - 19th July 2018

As mentioned in the introduction, we’ve been experiencing a bearish monthly chart since the beginning of the year, as shown above, and the present month of July still have price floating above the months opening price. The Bitcoin to USD exchange rate is currently trading within a range with resistance and support at $12013.89, and $6115.00. The major observed pattern formed in this time frame is the strong bearish accumulation/pressure, as well as the descending triangle pattern. We’ll talk more on the descending triangle pattern moving forward on the weekly chart.

BTCUSD: Weekly Chart

For traders having a strong bearish bias towards the BTCUSD on a longer term, the most significant level for the price to violate is the $6115.00 support level. For now, the price has not closed below the price from a weekly chart perspective. As soon as this happens, we should expect Bitcoin price to go into the $5000.00 and $3000.00 range. 

BTCUSD: Daily Chart

Both consecutive bullish regular divergence setups shown above from previous weeks have signalled a weakening of the bearish accumulation. The second attempt at a bullish divergence pattern held its ground as it coincides with a strong buying pressure within the same zone on 24-06-2018. A price close above another bearish accumulation this week 16-07-2018 triggered a bullish entry signal that sent the price into the $7000.00 level. 

BTCUSD: 4-hour Chart

From the above 4-hour chart, we now get a clearer observation of last week’s price dynamics as well as the buildup into this week’s bullish trend. Towards the late hours of 12-07-2018, there was the bullish closing price that nullified the bearish accumulation on the same date. This served as the beginning of this week’s bullish trend on the 4-hour chart.

BTCUSD: 2-hour Chart

We decided to further illustrate the trend transition from bearish to bullish on a 2-hour chart. The pair was in a bearish trend throughout last week, with a declining-ruler trend pattern. Coming to the end of last, over the weekend, the pattern transitioned into a Chuvashov’s fork pattern, as price finally closes above the last bearish trend line. This price close triggered the bullish trend that sends price above $7000.00 this week.

Conclusion and Projection

Take note of the Mother bar and Inside bar patterns formed on 26-03-2018 and a similar one on 18-06-2018 of the weekly chart. The current bullish move we are experiencing may be following a similar pattern as the one formed on the 26th. Therefore, while we buy into the current bullish move, let’s not ignore the higher timeframe patterns and how significant the support and resistance levels are. The current bullish move could be a trap.

For now, we are bullish on the BTCUSD, chart and like most smart money and Bitcoin brokers out there, we will scale into the position with added orders as price violates the resistance levels or the formation of new patterns that support buying. On the longer term, we will short at the formation of high probability setups.

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