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Wall Street begins to see weakness in Bitcoin charts
(Bloomberg) – Bitcoin has yet to recover from its inexplicable weekend swoon, and now the investing public is on edge over the infamous volatile sign’s next step. Sign in that ‘a chart is a chart is a chart’ ‘, Michael Purves of Tallbacken Capital Advisors, who weighed in virtually crypto for the first time, sent a note on Wednesday with a technical analysis of trading patterns of the coin. The recent highs of Bitcoin, among others, have not been confirmed by the relative strength index, and the upward momentum is fading, he said. ” From a technical perspective, the bullish issue seems very challenging in the short term, ” Purves, the firm’s CEO, writes. Purves’ decision to comment is the latest sign that Bitcoin has become too big to ignore Wall Street. As more companies allow customers to address the asset and more institutional money is tied to its performance, the card viewers capitulate and now lend their expertise to the growing amount of analytics. Earlier, JPMorgan Chase & Co. the last few times they have seen such negative price actions in Bitcoin, buyers have returned in time to avoid deeper slumps. This time they are worried. If the largest cryptocurrency does not break above $ 60,000 soon, momentum signals will collapse, the strategists wrote in a note on Tuesday. It is likely that traders, including Commodity Trading Advisers (CTAs) and crypto-funds, have been at least partially behind the build-up of long-term futures contracts in Bitcoin over the past few weeks, as well as the relaxation in recent days, they said. ‘a steep liquidation in a similar way to mid-February, mid-January or late November,’ ‘the strategists said. “Momentum signals will of course expire from here for several months, given their ever-increasing level.” In the previous three cases, the overall flow momentum was strong enough to break Bitcoin quickly above the key thresholds, yielding further build-up in position by JPMorgan said: “Whether we see a repeat of previous episodes in the current economy, has yet to be seen, “said the strategist. The likelihood of this happening again seems lower because the decay of momentum seems more advanced and therefore harder to reverse, they added. The flow to Bitcoin funds also appears to be weak, but Bitcoin rose as high as $ 64,870 at the time of the Nasdaq listing of Coinbase Global Inc. The currency is still about 90% higher than the previous year. The coin, less than five of the past six sessions, has struggled to catch up with its 50-day moving average of about $ 56,810. For many graphic designers, this is a clumsy indicator because it tends to determine the price moment trends. If Bitcoin cannot cross its short-term trend line, it could move lower and test the $ 50,000 level, about a 10% drop from where it currently trades. The next support area is the 100-day moving average around $ 49,208. This indicates a decline of 11% from Wednesday’s trading levels. Tallbacken’s Purves, which says the currency’s eruption in 2017 and its subsequent decline are a useful case study, also points to Bitcoin’s daily MACD signal – or the moving average convergence divergence meter – which has become bearish in the interim. And its performance is still tied to Cathie Wood’s uber-popular ARK Innovation ETF. “It does not seem to be a favorable risk reward right now to trade Bitcoin on the bullish side, and if you have made a profit, it seems like a good time to write to Purves, and he is sure it will be difficult to determine how much it may decline further. Institutional buyers will be the key. “While the upside momentum is clearly being challenged here, it is unconvincing how much downside risk remains,” he wrote. “It is quite possible that Bitcoin could simply consolidate into a series for some time.” Bitcoin fell 3.2% to $ 54,996 on Wednesday. Smaller and alternative currencies that have picked up in recent days have also declined, with Dogecoin – the poster child for taking crypto-risk – up about 15% to around 31 cents to trade. According to CoinMarketCap.com, the previous day was a high of 42 cents. Visit us at bloomberg.com for more articles like this. © 2021 Bloomberg LP