Bitcoin, the leading cryptocurrency, is currently trading between the range of $40,850 to $41,075. Investors are closely monitoring various charts, oscillators, and moving averages to gain insights into the next potential move of bitcoin. The current market conditions suggest a critical juncture for the cryptocurrency, with oscillators signaling neutrality and moving averages presenting a mixed picture.
Bitcoin's Downtrend on the 4-hour Chart
When analyzing the 4-hour chart, it becomes evident that bitcoin is currently experiencing a downtrend. This downtrend is characterized by consistent lower highs and lower lows. Notably, the price dropped from approximately $43,440 to $40,513, indicating a significant decline. The increased selling pressure during these downward movements further supports the bearish sentiment. The formation of the current bearish candlestick pattern suggests that the downtrend may continue.
Different Perspective on the Daily Chart
Contrary to the 4-hour chart, the daily chart offers a different perspective. It previously showcased a bullish run, with prices surging from around $35,378 to $44,729. However, the trend has recently reversed, and a sequence of downturns is now observed. The intensified selling volume during these down days indicates a strong bearish sentiment in the market, potentially leading to further declines.
Neutral Oscillator Readings
Examining the oscillator readings reveals a more neutral stance. The relative strength index (RSI) stands at 52, the Stochastic oscillator at 33, and the commodity channel index (CCI) at -27, all within the neutral range. Similarly, the average directional index (ADI) at 37 and the awesome oscillator at 2230 also indicate neutrality. However, the momentum indicator at -3227 and the moving average convergence/divergence (MACD) level at 1092 suggest selling action, thereby adding complexity to the current market analysis.
Divergent Moving Averages
The moving averages provide a divergent view. Short-term exponential moving averages (EMA) and simple moving averages (SMA) for 10 and 20 days signal a sell with values at $41,891, $42,260, $41,291, and $41,683, respectively. In contrast, longer-term EMAs and SMAs (30, 50, 100, 200 days) indicate a buying opportunity. The 200-day EMA and SMA stand at $32,057 and $30,845, respectively, showcasing a bullish long-term trend amidst short-term volatility.
Caution for Traders
Given the current scenario, traders should exercise caution. For those considering short positions, a break below the last low of $40,513 could be a potential entry point. It is advisable to set a stop loss above the most recent high or a lower high. On the other hand, for long positions, it is crucial to monitor reversal patterns, such as a bullish engulfing candle or a higher low setup accompanied by increased buying volume.
From a long-term perspective, bitcoin's outlook remains optimistic. Despite recent downward trends observed on the 4-hour and daily charts, the stronger moving averages over longer periods (30, 50, 100, and 200 days) indicate a robust bullish undercurrent. The presence of the 200-day EMA and SMA positioned well below the current price level suggests that the current phase could be a temporary consolidation before a potential upward breakout.
The immediate outlook for bitcoin leans towards bearishness. The prevailing downward momentum observed in the 4-hour and daily charts, coupled with short-term moving averages signaling a sell, paints a cautionary picture for the near future. The consistent lower highs and lower lows, along with increased selling volume, indicate a strong bearish sentiment.
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Frequently Asked Questions
What are the advantages of a gold IRA
The best way to save money for retirement is to place it in an Individual Retirement Account. It will be tax-deferred up until the time you withdraw it. You can decide how much money you withdraw each year. There are many types to choose from when it comes to IRAs. Some are better for those who want to save money for college. Others are designed for investors looking for higher returns. For example, Roth IRAs allow individuals to contribute after age 59 1/2 and pay taxes on any earnings at retirement. However, once they begin withdrawing funds, these earnings are not taxed again. So if you're planning to retire early, this type of account may make sense.
An IRA with a gold status is like any other IRA because you can put money into different asset classes. Unlike a regular IRA that requires you to pay taxes on the gains you make while you wait to access them, a gold IRA does not have to do this. People who want to invest their money rather than spend it make gold IRA accounts a great option.
An additional benefit to owning gold through an IRA, is the ease of automatic withdrawals. You won't have the hassle of making deposits each month. You could also set up direct debits to never miss a payment.
Finally, the gold investment is among the most reliable. Because it isn't tied to any particular country its value tends be steady. Even in economic turmoil, gold prices tends to remain relatively stable. Gold is a good option for protecting your savings from inflation.
What is the value of a gold IRA
A gold IRA has many benefits. You can diversify your portfolio with this investment vehicle. You have control over how much money goes into each account.
You also have the option to transfer funds from other retirement plans into a IRA. This will allow you to transition easily if it is your decision to retire early.
The best thing is that investing in gold IRAs doesn't require any special skills. They're available at most banks and brokerage firms. Withdrawals can be made instantly without the need to pay fees or penalties.
That said, there are drawbacks too. Gold has historically been volatile. It's important to understand the reasons you're considering investing in gold. Are you seeking safety or growth? Is it for insurance purposes or a long-term strategy? Only by knowing the answer, you will be able to make an informed choice.
If you plan to keep your gold IRA indefinitely, you'll probably want to consider buying more than one ounce of gold. A single ounce isn't enough to cover all of your needs. Depending on your plans for using your gold, you may need multiple ounces.
If you're planning to sell off your gold, you don't necessarily need a large amount. Even one ounce is enough. But, those funds will not allow you to buy anything.
How much gold should you have in your portfolio?
The amount that you want to invest will dictate how much money it takes. For a small start, $5k to $10k is a good range. As your business grows, you might consider renting out office space or desks. This will allow you to pay rent monthly, and not worry about it all at once. Only one month's rent is required.
Also, you need to think about the type of business that you are going to run. In my case, I run a website-creation company. Our clients pay us between $1000-2000/month and depending on their order. You should also consider the expected income from each client when you do this type of thing.
Because freelance work pays freelancers, you won't likely get a monthly income if you do freelance work. Therefore, you might only get paid one time every six months.
You need to determine what kind or income you want before you decide how much of it you will need.
I recommend starting with $1k-$2k of gold and growing from there.
Who is entitled to the gold in a IRA that holds gold?
The IRS considers gold owned by an individual to be “a type of money” and is subject taxation.
This tax-free status is only available to those who have owned at least $10,000 of gold and have kept it for at minimum five years.
The purchase of gold can protect you from inflation and price volatility. But it's not smart to hold it if your only intention is to use it.
You will need to declare the value of gold if you intend on selling it one day. This could impact how capital gains taxes you owe for cash investments.
To find out what options you have, consult an accountant or financial planner.
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
- 7 U.S. Code SS7 – Designation Boards of Trade as Contract Markets
- 26 U.S. Code SS 408 – Individual retirement account
- Do You Need a Gold IRA to Get Retirement?
- What are the Options Types, Spreads, Example, and Risk Metrics
- Gold IRA: Add Some Sparkle To Your Retirement Nest Egg
- Understanding China's Evergrande Crisis – Forbes Advisor
The History of Gold as an Asset
From the very beginning of time, gold was a currency. It was universally accepted and loved for its beauty, durability, purity and divisibility. In addition, because of its value, it was traded internationally. Different weights and measurements existed around the world, however, because there were not international standards to measure gold. One pound sterling, for example, was equivalent in England to 24 carats, and one livre tournois, in France, to 25 carats. A mark, on the other hand, was equivalent in Germany to 28 carats.
In the 1860s the United States began issuing American currency made up 90% copper (10% zinc) and 0.942 gold (0.942 pure). This led to a decrease of demand for foreign currencies which in turn caused their prices to rise. This was when the United States started minting large quantities of gold coins. The result? Gold prices began to fall. Due to the excessive amount of money flowing into the United States, they had to find a way for them to repay some of their debt. They decided to return some of the gold they had left to Europe.
Because most European countries did not trust the U.S. dollar, they started accepting gold as payment. Many European countries began to use paper money and stopped accepting gold as payment after World War I. The value of gold has significantly increased since then. Even though the price fluctuates, gold is still one of best investments.
By: Jamie Redman
Title: Bitcoin Technical Analysis: BTC Navigates Choppy Waters and Uncertainty
Sourced From: news.bitcoin.com/bitcoin-technical-analysis-btc-navigates-choppy-waters-and-uncertainty/
Published Date: Mon, 18 Dec 2023 14:00:06 +0000