After falling from just over 67,500 to a low near 15,000, a 77% peak-to-trough loss, Bitcoin then spent around 13 months mostly going sideways. Then suddenly this week buyers appeared and prices started to climb again, as if the good old days had returned after a long, long vacation. Ethereum and most of the rest of the crowd joined the rise.
In typical market fashion, the rally comes at a time when the biggest former stars in the business are just starting to take on the music. Sam Bankman-Fried, famous for his shorts and t-shirts, is now settled in his parents’ house near Stanford University, having left the Bahamas after authorities discovered problems with his crypto business -currency.
“People could finally go to jail?” must mean that a market bottom is surely near, according to those in touch with the decentralized zeitgeist. It’s something like “all the bad news is out”, the old saw applied to the stock market. Whether that’s actually the case for crypto remains to be seen, of course, but here are the latest charts showing the new action.
Within days of trading, the world’s most popular cryptocurrency is back above its 200-day moving average (the red line) and well above its 50-day moving average (the blue line) which is right at the beginning of “uptrend”.
The volume (the greyish bars below the price) is just decent and nothing out of the ordinary. The relative strength indicator (RSI, below the price chart) is in the “way overbought” zone.
The weekly price chart for Bitcoin is here:
This is not so exciting in the longer term: price has returned to October/November resistance, which is unsurprising given the way markets typically move up and down. Bitcoin remains below both significant moving averages, a less than bullish aspect although with cryptocurrencies anything is possible.
The difference between this and the Bitcoin chart is this: sellers moved quickly to take advantage of Ethereum’s proximity to the October/November resistance level just above 1600. Other than that, it is a nice pop above the moving averages and now the relative strength indicator is already “overbought”.
The weekly chart for Ethereum looks like this:
It is back above the 200 week moving average which continues to slowly rise. This move slows the descent of the 50-week moving average, but only a little.
Here is the daily chart for XRP
As the price begins to approach the November resistance zone of $0.41, enough sellers seem to be driving it back down. Note that the rise takes XRP barely above its 200-day moving average and quickly well above its 50-day moving average. The relative strength indicator is not quite in the “overbought” range.
The weekly chart for XRP looks like this:
The price is off the lows but is far from the September/October highs and the 50 week moving average crosses below the 200 week moving average, generally less than bullish.
That said, for all cryptos, please consider how important it is to remember that half of all bitcoin exchanges may be fake, according to this Forbes analysis. Have fun.
No investment advice. For educational purposes only.