Cryptocurrency Market Research

Jan 4, 2019

Bitcoin / U.S. Dollar


Technical Analysis

Trading Signals

Independent Market Analyst

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 2 Table of Contents

TRADE SIGNALS

Short-term Medium-term
1-4 weeks’ 6 months’ Page
forecast horizon forecast horizon Number

TECHNICAL ANALYSIS

Bitcoin Technical Indicators NEUTRAL SHORT 3

Bitcoin Chart Patterns & Trend Channels – SHORT 5

CONSENSUS TRADE SIGNAL NEUTRAL SHORT

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 Analytical approach Technical Indicators

3 Technical Indicators Forecast horizon Short-term Medium-term

Bitcoin / U.S. Dollar
Trading recommendation NEUTRAL SHORT

SUMMARY
NEUTRAL

SHORT LONG

STRONG SHORT STRONG LONG

Trend (MAs): SHORT Oscillators: LONG

8 1 8 1 6 3
Short Neutral Long Short Neutral Long

COMMENTARY
On a daily chart for BTC/USD, technical indicators generate the following trade signals for the next week:
 Slow moving averages (MAs) generate a sell signal, meaning that a medium-term trend for BTC/USD is downward.
Fast MAs indicate a buy signal, which means that a short-term correction upward is highly probable, before Bitcoin
price continues its downward trend. Oscillators indicate a neutral stance, with a slight margin in favor of a buy signal.
 Therefore, the weekly consensus trade guidance is neutral, assuming that a short-term correction upward is probable.
TREND INDICATORS (MAs)
Name Value for BTC/USD Trade Signal

Exponential Moving Average (5) 3,969.6 Long

Exponential Moving Average (10) 3,945.8 Long
Exponential Moving Average (20) 3,924.0 Long
Exponential Moving Average (30) 3,995.3 Short
Exponential Moving Average (50) 4,277.6 Short
Exponential Moving Average (100) 4,960.1 Short
Exponential Moving Average (200) 5,832.6 Short
Ichimoku Cloud Base Line (9, 26, 52, 26) 3,799.6 Neutral
Volume Weighted Moving Average (20) 3,910.4 Long

OSCILLATORS
Name Value for BTC/USD Trade Signal

Relative Strength Index (14) 50.3 Neutral

Stochastic %K (14, 3, 3) 44.5 Neutral
Average Directional Index (14) 19.5 Neutral
Awesome Oscillator 133.1 Long
Momentum(10) (163.1) Long
MACD Level (12, 26) (20.8) Long
Stochastic RSI Fast (3, 3, 14, 14) 62.7 Neutral
Williams Percent Range (14) (58.2) Neutral
Bull Bear Power 153.4 Short
Ultimate Oscillator (7, 14, 28) 54.4 Neutral

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 Analytical approach Technical Indicators

4 Technical Indicators Forecast horizon Short-term

Bitcoin / U.S. Dollar
Investment recommendation NEUTRAL

A Closer Look at Trading Signals Generated by Technical Indicators (BTC/USD, 4-hours time frame)
 During a period from November 14 until December 15, Bitcoin price has been in a strong downward trend, showing a
50.35% depreciation from $6,450 to $3,240. Slow moving averages (MAs) on a daily chart generate a strong sell
signal, meaning that a medium-term trend for BTC/USD is downward.
 Beginning from Dec 15 until today, Bitcoin price is moving upward with moderate volatility. Fast MAs indicate a buy
signal, meaning that a continuation of a short-term uptrend is highly probable.
 Oscillators indicate a neutral stance, with a slight margin in favor of a buy signal. Stochastic oscillator (14, 3, 3),
which is a momentum indicator, is in a short-term buy mode. RSI provides a similar signal.
 Trend channel, as a chart pattern, indicates that a short-term price trend is upward. Assuming that a new short-term
upward wave has commenced on Dec 15, this period can be best approximated by a linear equidistant channel, as
shown on Exhibit 1 below.

Trading Signal
 The medium-term trend is downward. Over the short-term (3-5 days), an upward retracement toward $4,500 is
highly probable, with the subsequent continuation of the medium-term downward trend. Therefore, we recommend
using $4,500 as a take-profit target for long positions opened on BTC/USD.
 A decline in price below the $3,700 level would automatically generate a strong sell signal and confirm the continuation
of a medium-term downward trend. If the breakout below the $3,700 support level occurs, it is expected to be
meaningful and volatile. Therefore, we recommend using this price as a stop-loss level for long positions in BTC/USD,
below which a reversal (sell) signal becomes valid.

Exhibit 1: BTC/USD, oscillators, trend indicators, and trend channels

The closest significant support and resistance levels

The closest significant support level The closest significant resistance level

Support $ 3,700 Resistance $ 4,400

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 Analytical approach Bitcoin Trend Channels

5 Chart Patterns & Trend Channels Forecast horizon Medium-term

Bitcoin / U.S. Dollar
Investment recommendation SHORT

Medium-term Trading Signals based on Trend Channels

 Since the beginning of 2018 until today, Bitcoin price has been moving down in cycles with each subsequent new
high being formed lower than the prior high. This represents a downward trend chart pattern and means that the
selling demand is exerting sustainably greater price influence than buying demand. Until the balance of market forces
changes, the price is expected to continue moving in a downward trajectory.
 Taking a closer look at a medium-term forecast horizon (1-3 months), we see that a new downward channel has
formed in December 2018. This channel represents a medium-term downward price trend, which began on Nov 14,
2018, after breaking down through a strong horizontal support level at $6,000.
 Before the price broke below it, the $6,000 level was deemed a strong support level for BTC/USD, due to a variety of
technical and fundamental factors. Before the $6,000 support level was broken, the market tested it four times, in each
of which buying activity had been sufficient to stop further decline in price and the market achieved a relative balance
between supply and demand.
 The breakout below the $6,000 has been meaningful and volatile, causing BTC/USD to decline by 50.1% in just one
month. We believe this breakout generated a strong medium-term downward trend signal, which remains valid
today, despite the occurrence of periodic short-term upward retracements.

Exhibit 2: BTC/USD, Chart Patterns & Trend Channels

Medium-Term Price Targets Based on Trade Channels

Target parameters Values

Price Target $ 3,300

Upper Bound $ 4,500

Lower Bound $ 2,100

Forecast Horizon 1 month (02/01/2019)

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 6 Full Risk Disclaimer

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Trading with leverage involves and high level of risk and is not suitable for all investors. This content is for educational purposes only.
Monfex is not liable for any losses incurred as a result of this content. See full risk disclaimer.