BTC looks set to make further gains amid mixed action in the crypto markets.
Having hit a four-day high of $8,621.27 yesterday, CoinDesk's Bitcoin Price Index (BPI) fell to $7,754.67 at 05:29 UTC today. As of writing, BPI is at $8,246. The cryptocurrency has depreciated by 1 percent in the last 24 hours, according to data source CoinMarketCap.
Meanwhile, bitcoin (BTC) offshoot bitcoin cash has strengthened by 25 percent in the last 24 hours, while Ripple's XRP token is reporting a 3 percent rise. The losing side includes names like Ethereum's ether token, Cardano, Stellar and NEO, which are all showing slight dips.
Bitcoin's retreat from $8621.27 to $7,754 coincided with a 1000 point drop in the Dow Jones Industrial Average (DJIA), reportedly due to a rise in U.S. bond yields and fears of higher inflation.
Reports are doing the rounds that the 90-day correlation between the daily percent returns of the cryptocurrency and the S&P 500 has jumped to 33 percent – the highest since January 2016.
Though this is up for debate, BTC's lackluster price action during the recent bout of equity market sell-off may discredit the theory often put forward that the cryptocurrency is a new safe haven asset like gold, the Swiss franc and treasuries.
So, for the time being, bitcoin and cryptocurrencies in general are unlikely to receive a shot in the arm due to instability in other markets.
Yet, bitcoin often confounds expectations, and the technical chart indicates scope for a rise to $9,000 over the weekend.
The above chart (prices as per Coinbase) shows:
The previous two candles had big tails (big gap between lows and close), indicating strong dip demand, and have also established $7,750 as strong support. The candles also indicate that the descending trendline (1) is now acting as a strong support.
Meanwhile, on the higher side, BTC may face strong resistance above $8,625 considering the fact that bulls have faced rejection $8,650 and $8,625 in the last 24 hours.
Back-to-back 4-hour candles with long tails at key trendline support indicate BTC could witness an upside break of the bull flag pattern.
The bullish breakout would be confirmed after 1-hour candle closes above the flag resistance. In such a scenario, prices could reach $9,000–$9,185 (target as as per the measured height method, i.e. pole height added to breakout price).
On the downside, a break below $7,535 (Feb. 7 low) would signal breach of higher lows pattern and open the door for a drop to $7,000 levels.
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Coinbase and Ripple.
Stock prices image via Shutterstock
The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at firstname.lastname@example.org. Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.
IBM Says Blockchain Can Power 'Open Scientific Research' in New Patent Filing
A patent application published Thursday claims the process of conducting scientific research can benefit from the blockchain.
Led by a team at IBM's Watson Research Center, the patent application p
CFTC Fines Bitcoin Trader $1.1 Million for Crypto Fraud
The U.S. Commodity Futures Trading Commission (CFTC) has jailed a bitcoin trader and fined him over $1 million for running a fraudulent bitcoin and litecoin scheme.
According to a press release iss
Japanese Firms Claim Success in Marine Insurance Blockchain Trial
One of Japan's largest insurance companies, Tokio Marine & Nichido Fire Insurance, and IT firm NTT DATA have completed a trial that put the paperwork for marine cargo insurance claims on a blockchain.
Accenture Puts Software License Management on a Blockchain Platform
Global professional services giant Accenture has rolled out a new software license management application built with tech from distributed ledger startup Digital Asset.
Accenture announced in a pre
Singapore's Central Bank, SGX Develop Blockchain Settlement System
The Monetary Authority of Singapore (MAS) and the country's stock exchange, Singapore Exchange (SGX), have developed a settlement system for tokenized assets that can work across different blockchains
Colorado Regulators Crack Down on Four More ICOs
Colorado regulators took action against four ICOs Thursday, bringing the state's total number of cease-and-desist orders against crypto startups to 12.
The state's "ICO Task Force" rebuked Bitcoin
Ethereum Sets Tentative January Goal for Next Blockchain Upgrade
Developers are eyeing January 16th as the date on which Constantinople, ethereum's upcoming network hard fork, could launch.
The upgrade for the world's second-largest blockchain was originally tar
For Bitfinex Users, Dollar Withdrawals Are Now a Weeks-Long Struggle
Three weeks after being assured that everything was running smoothly, some customers of cryptocurrency exchange Bitfinex are wondering why they still can't withdraw their money.
On Oct. 15, the cry