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Increased Bitcoin Volatility, Volume Keeping up Despite Intermittent Selling

November 9, 2017 at 22:00 by Daniel Green

Bitcoin price fluctuations have reasonably abated since yesterday, but the prevailing trend does appear to be leaning toward a moderately bearish sentiment. Hourly trading volume has continued to be dominated by sell orders in the past 24 hours, contrasting the subtle increase in average daily volume since the beginning of the month.

The prevailing trading range, spanning from the $6,700 weekly low up to the recent $7,888 all-time high, is now characterized by double digit oscillations when expressed in percentages (the 13.95% run-up to new all-time high, and the immediate 10.15% drop afterwards stand out the most), which is a significantly noticeable acceleration in daily and hourly price movement.

With supports abound, two are especially fixating: the $6,700 weekly and $4,700 monthly lows. Other supports for the ongoing trading range are at $6,820.38, $6,922.58, $6,956.42, and $6,991.37. A breakdown below the $6,700 weekly low, could result in a retest of the secondary supports: $6,311.77, $6,226.98, $6,178.96, $6,025.93, $5,872.75, $5,645.18, $5,591.17, $5,407.07, $5,101.91, $4,978.58, and the $4.740.91 support. Any reversals below the $4,700 monthly low, will without a doubt, signal the end of this bull-run.

Alternative crypto currencies such as etheruem, ethereum classic, monero, and litecoin are securing new weekly highs on both bitcoin and fiat trading pairs. An impression is forming that traders and key market participants, might be trying to hedge against any negative or positive future market developments. The monstrous growth we have observed, has traditionally always been succeeded by a clean-up phase, this applies equally to bitcoin and other crypto currencies/assets as well.

The $7,888 all-time high is an indisputable resistance level, secondary footholds are at the previous four highs: $7.588.73, $7.570, $7,499, and at $7,350. If by some chance we witness one more breakout above the all-time high, then Fibonacci extensions could offer further insight on possible targets. For the current trading range, these extensions are defined at $8,620.32 (fib 1.618), $9,076 (fib 2.0), $9,810 (fib 2.618), $10,264 (fib 3.0), and $10,998.18 (fib 3.6). As for Fibonacci retracements, there appears to be only one close adjacency, mainly between the $6,922.58 support and 0.236 fib ($6,979.14).

The 30-day MA has been see-sawing and teetering ever closer to the 180-day MA, and a bearish crossover could occur, if there is matching volume in the short-term. A sufficiently powerful downward thrust could even see the 30-day MA catch-up to the 365-day MA, hopefully within the next couple of days. The EMA is emerging as inconclusive on the hourly, while the VWMA is echoing the 180-day MA at marginally lower levels.

Bollinger bands on the daily have expanded considerably, and volatility may be imminent. However, a breach above the upper bands suggests a partialy bullish bias. The 4-hour is the opposite, with the bands holding a stable gap for the time being. No severance or early signaling of upward price momentum or movement. Almost all trading activity remains confined, but the price has dropped below the lower bands on occasion. The 1-hour bands are more disruptive for example, with wicks breaking above and below the indicators constraints.

The RSI is advancing closer to a state of being oversold, and the same could be said for the Williams %R significant, although to a lesser degree. OBV is quite formidable in comparison to the falling volume. MACD has endured 2 bearish (marked in red) and 2 bullish (marked in green) crossovers in the last 48 hours, with a third bullish crossover likely to happen by the days end.

Bitcoin launched from the $6,922.15 November 6 (GMT 01:00) daily low into a rapid price surge, which ended up abruptly concluding at the $7,888 all-time high on November 8 (GMT 17:00). This was quickly followed by a pullback to the $7,078 November 8 (GMT 17:00) daily low, and a short rebound to the $7,487 November 9 (GMT 02:00) daily high. The price of the first decentralized crypto currency was holding above $7,193.27 at the time of writing.

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