05 November 2019

Technical Analysis Tuesday: Bitcoin bullish outlook & Stellar burns 50% of token supply

Patrick Heusser

Patrick Heusser

Senior Trader at Crypto Broker AG

About the author

In today’s technical analysis report, we’ve got XLM (Stellar) as our special guest. But first, let us talk about bitcoin.

BTC$ (weekly)
Our analysis from last week is still valid. The levels of importance are growing on both sides: 9k to the downside and 10.5k to the upside.

In my opinion, we have finished the ABC correction after a very clean 5-wave upmove sequence. The impulsive price push higher from Friday a week ago gives me confidence that the correction is over and we can start the next 5-wave sequence.

BTC$ (daily)
Zooming into the daily chart: we are facing resistance around the lower band of the Ichimoku cloud. That band has been keeping prices in check on the topside for over a week now. Solid support is given at around the 9k level. Since we are approaching the lower band of the cloud due to time decay, I expect some price reaction sooner rather than later.

If I am not mistaken we are in the making of wave two. I will consider it confirmed when we take out 10.5k, which will turn me pretty bullish as we would then enter into wave three, which is the most impulsive one (Elliot Wave Theory). Plus, we would finally push out of the bearish Ichimoku cloud on the weekly and daily chart.

BTC$ (4h)
As for the 4h chart, there is not much to add. It will look bullish as long we can hold the 9k level.

ETH$ (daily)
No change here: $160 support and $220 resistance. The Ichimoku cloud is still keeping prices in check, with the lower band of the cloud working as resistance.

XLM$ (daily)
In a bold move the Stellar foundation decided to burn 55 billion tokens (or roughly 50%) of their supply. It sparked a price push higher by roughly 35% and is currently at around 20%.

The price spike stopped at the resistance level of $0.09 and retraced back down to $0.086, which is a larger liquidity pool (volume bars on the right-hand side).

To be honest, I think $0.09 was a good level to sell a bit as I do not believe that such manipulative actions have a lasting positive effect on the price.

Gold$ (weekly)
There is not much to add from last week’s comment. Gold is still consolidating and per the ascending triangle price target looking set to march higher towards $1,600.

$CNH (daily)
It is doing what it is supposed to be doing. The price reaction followed suit after we broke through the upper band of the cloud and moved swiftly lower.

There is not much to analyze in addition to this. I expect the price to drop further towards the $6.95 level.

LTC$ (daily)
Things are starting to get more interesting now. $64 has proven again to be a tough resistance to break. Plus the bearish Ichimoku cloud is coming closer, which can result in further price pressure to the downside.

I am going short here with a stop just above $64 and a target of around $52.

BCH$ (daily)
It looks like the market has not made a decision yet as to where prices should go.

$310 is the invalidation level for all shorts.

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