Introduction
Bitcoin, with a market capitalization of $798 billion and a 24-hour trade volume of $16.58 billion, is currently hovering just above the $41K zone. In this article, we will analyze bitcoin's technical indicators and charts to gain insights into its current market state.
Technical Analysis
Oscillators and Key Indicators:
The Relative Strength Index (RSI) stands at 40, indicating a neutral to bearish stance. The Stochastic at 12 and Commodity Channel Index (CCI) at -120 also suggest a balancing act. However, the Momentum indicator points to positivity at -2054, contradicting the Moving Average Convergence/Divergence (MACD) level at -484, which signals a bearish outlook.
Moving Averages:
The Exponential Moving Average (EMA) and Simple Moving Average (SMA) across different timeframes, from 10 to 50 days, predominantly indicate negative sentiment, reflecting a downward trend. However, the longer-term EMAs and SMAs, specifically at 100 and 200 days, show bullish signals, suggesting potential long-term upside amidst short-term volatility.
Chart Analysis
4-Hour Chart
The 4-hour chart reveals a recent bearish trend, characterized by a significant drop and subsequent consolidation. This period of low volatility and consolidation may indicate market uncertainty. Traders may consider waiting for a bullish reversal or a breakout above resistance levels as potential entry points, while exits could focus on protecting against further downside movement.
Daily Chart
On the daily chart, bitcoin exhibits an extended bearish phase with consistent drops and increasing volume, confirming the strength of the downtrend. Entry points for long positions could be identified through bullish patterns at key support levels or candle closures above previous highs. Exits should focus on minimizing losses if the price breaks below support levels.
1-Hour Chart
The 1-hour chart provides a more granular view of bitcoin's price movements, showing a clear consolidation pattern after the downtrend. Entry points for long positions could be identified through breakouts or bullish patterns at support levels, while exit strategies should aim to minimize losses if the price breaks below recent lows, especially with significant volume.
Market Outlook
Bull Verdict
Despite the prevailing bearish signals across various technical indicators, bitcoin's market presents underlying strengths that could fuel a bullish reversal. The long-term moving averages and the potential for reversal patterns on the daily chart suggest resilience. If the market responds positively to broader economic cues and investor sentiment shifts, there is a reasonable prospect for bitcoin to initiate a recovery phase, breaking through current resistance levels and signaling a bullish trend.
Bear Verdict
The preponderance of bearish indicators across bitcoin's technical analysis points to a continued downtrend in the near term. Oscillators and short-term moving averages, especially on the 1-hour and 4-hour charts, indicate sustained selling pressure and a lack of strong buyer momentum. Unless there is a significant change in market dynamics or external factors, BTC is likely to face further downward pressure, making lower price levels a distinct possibility in the short to medium term.
It is important for investors to remain cautious in long positions, pay attention to reversal signals, and use strategic stop-losses to manage risks. The volume remains a critical indicator, and confirmation of trend strength through volume spikes is essential. Overall, the market outlook for bitcoin requires careful monitoring and consideration of both bullish and bearish scenarios.
What are your thoughts on bitcoin's market action on Monday? Share your opinions in the comments section below.
Frequently Asked Questions
Should You Invest Gold in Retirement?
The answer will depend on how many dollars you have saved so far and whether you had gold as an investment option at the time. Consider investing in both.
In addition to being a safe investment, gold also offers potential returns. This makes it a worthwhile choice for retirees.
Gold is more volatile than most other investments. Therefore, its value is subject to change over time.
This doesn't mean that you should not invest in gold. Instead, it just means you should factor the fluctuations into your overall portfolio.
Another benefit to gold? It's a tangible asset. Gold is more convenient than bonds or stocks because it can be stored easily. It can also be transported.
As long as you keep your gold in a secure location, you can always access it. There are no storage charges for holding physical gold.
Investing in gold can help protect against inflation. You can hedge against rising costs by investing in gold, which tends to rise alongside other commodities.
Also, you'll reap the benefits of having some savings invested in something with a stable value. When the stock market drops, gold usually rises instead.
Another benefit to investing in gold? You can always sell it. As with stocks, your position can be liquidated whenever you require cash. You don’t even need to wait until retirement to liquidate your position.
If you do decide to invest in gold, make sure to diversify your holdings. You shouldn't try to put all of your eggs into one basket.
You shouldn't buy too little at once. Begin by buying a few grams. Continue adding more as necessary.
The goal is not to become rich quick. Rather, it's to build up enough wealth so you won't need to rely on Social Security benefits.
Gold may not be the most attractive investment, but it could be a great complement to any retirement strategy.
Can the government seize your gold?
The government cannot take your gold because you own it. You earned it through hard work. It belongs to you. However, there may be some exceptions to this rule. For example, if you were convicted of a crime involving fraud against the federal government, you can lose your gold. Also, if you owe taxes to the IRS, you can lose your precious metals. However, even if you don't pay your taxes, your gold can be kept as property of the United States Government.
Who has the gold in a IRA gold?
The IRS considers an individual who owns gold as holding “a form of money” subject to taxation.
To be eligible for the tax-free status, you must possess at least $10,000 gold and have had it stored for at least five consecutive years.
Owning gold can also help protect against inflation and price volatility, but it doesn't make sense to hold gold if you're not going to use it.
If you plan on selling the gold someday, you'll need to report its value, which could affect how much capital gains taxes you owe when you cash in your investments.
Consult a financial advisor or accountant to determine your options.
What are the pros and cons of a gold IRA?
An Individual Retirement Plan (IRA) has a major advantage over regular savings accounts. It doesn't tax any interest earned. An IRA is a great option for those who want to save money, but don't want tax on any interest earned. But, this type of investment comes with its own set of disadvantages.
If you withdraw too many funds from your IRA at once, you may lose all your accumulated assets. The IRS may prevent you from taking out your IRA funds until you reach 59 1/2. A penalty fee will be charged if you decide to withdraw funds.
Another problem is the cost of managing your IRA. Many banks charge between 0.5% and 2.0% per year. Other providers charge monthly management charges ranging anywhere from $10 to $50.
If you prefer to keep your money outside a bank, you'll need to purchase insurance. Most insurers require you to own a minimum amount of gold before making a claim. Some insurers may require you to have insurance that covers losses up $500,000.
You will need to decide how much gold you wish to use if you opt for a gold IRA. Some providers limit the number of ounces of gold that you can own. Some providers allow you to choose your weight.
Also, you will need to decide if you want to buy physical gold futures contracts or physical gold. The price of physical gold is higher than that of gold futures. However, futures contracts give you flexibility when buying gold. They let you set up a contract that has a specific expiration.
You will also have to decide which type of insurance coverage is best for you. Standard policies don't cover theft protection, loss due to fire, flood or earthquake. However, it does cover damage caused by natural disasters. If you live near a high-risk region, you might want to consider additional coverage.
Apart from insurance, you should consider the costs of storing your precious metals. Insurance doesn't cover storage costs. For safekeeping, banks typically charge $25-40 per month.
You must first contact a qualified custodian before you open a gold IRA. A custodian maintains track of all your investments and ensures you are in compliance with federal regulations. Custodians are not allowed to sell your assets. Instead, they must keep your assets for as long you request.
After you've determined which type of IRA is best for you, fill out the paperwork indicating your goals. Information about your investments such as stocks and bonds, mutual fund, or real property should be included in your plan. It is also important to specify how much money you will invest each month.
Once you have completed the forms, you will need to mail them to your provider with a check and a small deposit. The company will then review your application and mail you a letter of confirmation.
A financial planner is a good idea when opening a gold IRA. A financial planner can help you decide the type of IRA that is right for your needs. They can help reduce your expenses by helping you find cheaper alternatives to buying insurance.
What Is a Precious Metal IRA?
An IRA with precious metals allows you to diversify retirement savings into gold and silver, palladium, rhodiums, iridiums, osmium, or other rare metals. These rare metals are often called “precious” as they are very difficult to find and highly valuable. These are good investments for your cash and will help you protect yourself from economic instability and inflation.
Bullion is often used for precious metals. Bullion refers actually to the metal.
You can buy bullion through various channels, including online retailers, large coin dealers, and some grocery stores.
A precious metal IRA allows you to invest directly in bullion, rather than buying stock shares. This ensures that you will receive dividends each and every year.
Precious metal IRAs do not require paperwork nor annual fees, unlike regular IRAs. Instead, you only pay a small percentage on your gains. Plus, you can access your funds whenever you like.
Should You Get Gold?
In the past, gold was considered a haven for investors during economic turmoil. Today, many people are looking to precious metals like gold and avoiding traditional investments like bonds and stocks.
The trend for gold prices has been upward in recent years but they still remain low relative to other commodities like silver and oil.
Some experts think that this could change in the near future. They believe gold prices could increase dramatically if there is another global financial crises.
They also mention that gold is becoming more popular due to its perceived worth and potential return.
Here are some things to consider if you're considering investing in gold.
- Before you start saving money for retirement, think about whether you really need it. It's possible to save for retirement without putting your savings into gold. That said, gold does provide an additional layer of protection when you reach retirement age.
- Second, you need to be clear about what you are buying before you decide to buy gold. Each offer varying degrees of security and flexibility.
- Don't forget that gold does not offer the same safety level as a bank accounts. You may lose your gold coins and never be able to recover them.
Do your research before you buy gold. You should also ensure that you do everything you can to protect your gold.
Statistics
- Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- (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)
External Links
cftc.gov
wsj.com
- Saddam Hussein’s InvasionHelped Uncage a Bear In 1989 – WSJ
- You want to keep gold in your IRA at home? It's Not Exactly Lawful – WSJ
finance.yahoo.com
irs.gov
How To
How to Buy Physical Gold in An IRA
The most obvious way to invest in gold is by buying shares from companies producing gold. This method is not without risks. There's no guarantee these companies will survive. Even if they do survive, there is still the possibility of losing money to fluctuating gold prices.
Another option is to purchase physical gold. You will need to either open an online or bank account or simply buy gold from a reliable seller. These options offer the convenience of easy access, as you don't need stock exchanges to do so. You can also make purchases at lower prices. It's also easy to see how many gold you have. You'll get a receipt showing exactly what you paid, so you'll know if any taxes were missed. You're also less susceptible to theft than investing with stocks.
However, there are disadvantages. For example, you won't benefit from banks' interest rates or investment funds. Additionally, you won’t be able diversify your holdings. You will remain with the same items you bought. Finally, tax man may want to ask where you put your gold.
Visit BullionVault.com to find out more about gold buying in an IRA.
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By: Jamie Redman
Title: Bitcoin Technical Analysis: Navigating Bearish Currents
Sourced From: news.bitcoin.com/bitcoin-technical-analysis-btc-navigates-through-bearish-currents/
Published Date: Mon, 22 Jan 2024 13:41:47 +0000
