Australia Markets open in 5 hrs 27 mins

Below $15K: Bitcoin Plays Defense Amid Bear Move

Omkar Godbole

Bitcoin remains on the defensive, despite yesterday's sharp recovery from $14,000 levels.

Data source OnChainFX indicates the world's largest cryptocurrency by market capitalization has depreciated by 4.54 percent in the last 24 hours. As of writing, CoinDesk's Bitcoin Price Index is at $14,750 levels.

The BPI fell to a low of $13,957.19 at 15:14 UTC yesterday, reportedly due to a sell-off triggered by price data site CoinMarketCap's unannounced decision to exclude three Korean exchanges from its averages.

However, bitcoin (BTC) was already on the back foot, possibly due to fears of China crackdown on the bitcoin mining industry in the country.

The BPI's failure to hold above $15,000 today only underscores the bearish undertone in BTC. Further, the technical charts indicate BTC is still not completely out of the woods.

Bitcoin chart

The above chart (prices as per Coinbase) shows:

  • Yesterday's recovery from the low of $14,000 ran out of steam at a high of $15,384. The retreat to sub-$15,000 levels indicates an increased risk of a downside break of the bear flag/rising wedge pattern.
  • The 50-day moving average (MA) is sloping upwards in favor of the bulls and could offer support at $14,030 levels.
  • The bulls have failed to capitalize on a favorable setup. Despite the higher low pattern (marked by circles) along the 50-day MA and a higher high pattern, prices have dropped to sub-$15,000 levels. The price action now indicates the bear grip is strengthening.

An argument is being put forward on social media that an inverse head and shoulder pattern could be in the making. While that is true, it is not necessarily good news, as the inverse head and shoulder is a bullish reversal pattern (that works well at the bottom of the downtrend). An inverse head and shoulders at the top usually works as a bull trap.

View

  • A close (as per UTC) below $14,700 (flag/rising wedge support) would mean the rally from the Dec. 22 low of $10,400 has ended. Prices could then breach support at $12,500 (Dec. 30 low) and slide towards $10,400-$10,000.
  • In the larger scheme of things, a break below $8,000 (support of the trend line sloping upwards from Sep. 15 low and Nov. 12 low) would be a cause of worry for the bulls.
  • Bullish scenario: A rebound from the 50-day MA, followed by a close above $16,000 would increase the odds of an upside break of the rising wedge.

Cannons image via Shutterstock

Related Stories

  • Finance
    AAP

    Medicare levy relief in federal budget

    The Turnbull government will no longer need to rely on the generosity of Australian taxpayers to fork out an extra $8 billion for the Medicare levy to fund the National Disability Insurance Scheme. In a speech on Thursday, Treasurer Scott Morrison will indicate better-than-expected tax receipts mean

  • Finance
    AAP

    Essential to return $98m in "over charges"

    NSW state-owned electricity distributor Essential Energy will return $98 million to customers through lower power prices after it "over-recovered" revenue. The opposition's energy spokesman Adam Searle on Thursday said Labor would pursue the government on whether Ausgrid and Endeavour

  • Finance
    AAP

    Telstra $10m fine pending over billing

    Telstra is set to learn whether it must pay up to $10 million in fines and customer refunds totalling $5 million after action by the consumer watchdog. Federal Court Justice Mark Moshinsky is on Thursday ...

  • Finance
    AAP

    Business tax cut comes under scrutiny

    Unions and business groups will give duelling advice on the merits of business tax cuts at a hearing on Thursday. The Senate's economics committee is inquiring into claims made by the Business Council and its corporate members that a proposed cut to the business tax rate to 25 per cent will deliver

  • Finance
    AAP

    Focus on disciplinary system for advisers

    The corporate watchdog and representatives of Australia's two professional organisations for financial planners will have to front the banking royal commission over what is done about poor or dodgy advice. The royal commission has turned its attention to the disciplinary system within the financial

  • Finance
    AAP

    Coles future in focus at Wesfarmers update

    The plan by Wesfarmers to spin off its Coles supermarkets and the future of its struggling UK Bunnings venture will be major talking points when the retail giant delivers its latest sales performance. The Perth conglomerate will release its third quarter sales update for Coles, Bunnings, Kmart, Target

  • Finance
    AAP

    Comcast offers $31b for Sky, 16% above Fox

    US cable company Comcast Corp has made a STG22 billion ($A40.55) offer for pay-TV group Sky, beating an already agreed takeover bid from Rupert Murdoch's Fox by 16 per cent. Comcast, which first proposed an offer at the same STG12.50-a-share price in February, said it would continue to engage with

  • $8bn Medicare levy increase axed: Morrison
    Finance
    AAP

    $8bn Medicare levy increase axed: Morrison

    Australians won't spend an extra cent on the Medicare levy as the Turnbull government promises to scrap a proposed $8 billion increase it says is no longer needed to fund the National Disability Insurance Scheme. The increase, a signature measure of the 2017 federal budget, was to cover the costs

  • Door still open for Turnbull tax cut talks
    Finance
    AAP

    Door still open for Turnbull tax cut talks

    Prime minister Malcolm Turnbull may yet deliver on his promise to cut tax for all companies, with two senators dealing themselves back in to talks. The federal government is two votes short in the Senate of passing the legislation to take the tax rate from 30 per cent to 25 per cent by 2026/27. It

  • Crossbenchers have fresh look at tax cuts
    Finance
    AAP

    Crossbenchers have fresh look at tax cuts

    Former Nick Xenophon Team crossbenchers are giving the Turnbull government's business tax cuts a "fresh look", in encouraging signs for the coalition. Rex Patrick and Stirling Griff, of the now Centre Alliance, had originally opposed the package, but have since met with top officials,

  • Finance
    AAP

    Aussies eye relief for household budgets

    Australians will be crying out for some hip pocket relief in this year's federal budget, with the latest polling and economic figures showing households are feeling the pinch. Personal income tax cuts are expected to be a centrepiece of the budget in two weeks' time. More than half of respondents

  • Labor calls to end live sheep trade mount
    Finance
    AAP

    Labor calls to end live sheep trade mount

    Calls are mounting within Labor to end the live sheep trade in the Middle East as the Awassi Express looks set to embark on its next voyage later this week after complying with a ventilation improvement order. The Australian Maritime Safety Authority imposed the order on the Emanuel Exports-chartered

  • Criticism of advice complaints process
    Finance
    AAP

    Criticism of advice complaints process

    Industrial umpire Donna McKenna is no stranger to disputes. Ms McKenna went to Sam Henderson for advice after seeing him on television and reading his articles in publications such as the Australian Financial Review and Money Magazine.

  • Advice would have cost client $500,000
    Finance
    AAP

    Advice would have cost client $500,000

    An industrial umpire would have lost $500,000 in superannuation if she followed the advice of a celebrity "financial guru" whose employee impersonated her on phone calls. Fair Work commissioner Donna McKenna rejected the "risible" advice of planner Sam Henderson, whose regular media

  • Finance
    AAP

    NAB execs' bonuses cut over advice issue

    A number of National Australia Bank executives had their bonuses cut over the widespread incorrect witnessing of beneficiary forms that became a "social norm" in its financial planning business. Senior NAB executive Andrew Hagger said the bank had acted to ensure the customers were not affected

  • More pokies allegations aimed at Crown
    Finance
    AAP

    More pokies allegations aimed at Crown

    Victoria's gambling regulator and police are investigating additional allegations of poker machine tampering at Melbourne's Crown Casino. It comes after independent MP Andrew Wilkie showed journalists "picks" he said were given to a former high-roller at the casino, allegedly used

  • Finance
    AAP

    Boral's quarterly earnings disappoint

    A prolonged US winter and heavy rain in Texas have hurt building products supplier Boral's earnings for the March quarter, sending the company's shares sharply lower. Earnings from the company's Australian operations were also below expectations in the three months to March 31, due to a

  • Weak inflation, lower $A help lifts shares
    Finance
    AAP

    Weak inflation, lower $A help lifts shares

    The Australian share market gained ground as the Australian dollar hovered at a four-month low and inflation remained below the Reserve Bank's target range. The benchmark S&P/ASX200 index added 35.6 points, ...

  • Finance
    AAP

    Stocks to watch

    Stocks to watch on the Australian stock exchange: AWC - ALUMINA - down 19 cents, or 6.8 per cent, at $2.62 S32 - SOUTH32 - down 38 cents, or or 9.6 per cent, at $3.58 Aluminium prices have posted their ...

  • Living cost, health preferred over tax cut
    Finance
    AAP

    Living cost, health preferred over tax cut

    Personal income tax cuts are meant to be a centrepiece of this year's federal budget, but a new poll shows Australians view the cost of living, health and job creation as higher priorities. The latest Essential poll published on Tuesday showed 51 per cent of voters rated addressing the cost of living

  • Banks, tax cuts separate issues: senator
    Finance
    AAP

    Banks, tax cuts separate issues: senator

    A key senator believes the Turnbull government's proposed business tax cuts and the revelations coming out of the banking royal commission are two separate issues. While Tim Storer is yet to be convinced that the cost of implementing business tax cuts are worth it, he is not calling for the banks

  • Senator not convinced tax cuts worth cost
    Finance
    AAP

    Senator not convinced tax cuts worth cost

    Independent senator Tim Storer is yet to be convinced that the $65 billion bill to cut the company tax rate over the next decade is worth it. The South Australian senator and his cross-bench colleague Derryn Hinch stood in the way of the Turnbull government from passing the tax reduction before Easter

  • Finance
    AAP

    Vic Anzac Day two-up revival decades on

    All bets are back on as a true blue Anzac tradition is set to be revived at a Victorian turf club after being abandoned 21 years ago. Punters will try their luck at two-up on Wednesday at Flemington Racecourse, the site of the state's first legal game on Anzac Day in 1991. The game, which has its

  • Finance
    AAP

    Soft Sydney weighs on capital home prices

    A downturn in Sydney home values continues to have a stifling effect on combined property prices in Australia's capital cities. Combined average prices in Sydney, Melbourne, Brisbane, Adelaide and Perth were steady in the week to April 22, and have slipped 0.1 per cent in the past four weeks, the

  • Finance
    AAP

    Aussie optimism dimmer in 10 years' time

    Many Australians are pessimistic about how liveable the country will be in 10 years' time, with rising living and housing costs the leading concerns identified in a new survey. A poll by National Australia Bank of 2,000 Australian adults shows that while nine in 10 adults believe the country is