Friday graced us with a positive fundamental trigger, with Bakkt finally being given the green light to launch Bitcoin derivatives trading on September 23. This follows almost an entire year of delays – and although the crypto market never lost interest in the upcoming platform for institutional investors, it was beginning to lose faith.
The renewed launch date reignited the spark, coming at a crucial moment to stave off a deeper market downturn. BTC immediately jumped by almost $300, fully compensating for its intra-day fall to $9,750 and finishing at an overall +0.86% gain at $10,400. The rest of the market returned to previous positions.
Friday, August 16 trading results. Source: Coin360
Just a few hours earlier Coinbase announced its acquisition of Xapo’s institutional business, a move that directly strengthens its Custody service. Piggybacking on the news, Coinbase CEO Brian Armstrong boasted about large inflows of institutional investor capital to its service.
Whether institutions were going to adopt crypto or not was an open question about 12 months ago. I think it’s safe to say we now know the answer. We’re seeing $200-400M a week in new crypto deposits come in from institutional customers.
— Brian Armstrong (@brian_armstrong) August 16, 2019
Curiously, the timing of the news coincided with the large fall-off mentioned earlier – likely a coincidence.
Going into the weekend, a traditionally lower-volume period of the week, these two announcements proved to be sufficient to keep Bitcoin trading firmly above $10,000.
Sentiment analysis by TheTIE.io provides useful insight into what might have driven Bitcoin’s price. On one hand, it shows a strong uptrend immediately following the Bakkt announcement – which is to be expected. On the other, sentiment momentum has clearly carried into the weekend, with two major spikes that aren’t attributable to any particular news.
Bitcoin sentiment over the weekend of Friday 16. Source: theTIE.io
Positive sentiment and the relative stability of the price over the weekend might have played into what is so far turning out to be a great Monday. Bitcoin is up 3.5% on the day so far, reaching the $10,750 level. The rest of the market is likewise positive, with Ethereum and XRP posting the most promising gains.
Bitcoin Price Chart, August 16-19. Source: CoinMarketCap
Could this be the start of a positive week for BTC? A 3% gain is by no means spectacular but it’s backed by a strong uptick in sentiment, which indicates an anticipation of investor interest pouring in. The cryptocurrency market has clearly stabilized so far, which paints a hopeful picture for the medium-term.
Technical Analysis: Nathan Batchelor on Bitcoin
Bitcoin is on the rise on Monday after we saw the cryptocurrency drifting higher over the weekend and performing a reasonably bullish weekly price close above the $10,000 level. The price has already broken through Friday’s trading high and positive sentiment towards cryptocurrencies appears to be spreading through the entire market.
I suspect that as long as Bitcoin buyers continue to hold price above the $10,391 level, we are increasingly likely to see the number one cryptocurrency testing back towards the technically important $11,000 to $11,100 resistance zone.
According to the four-hour time frame, Bitcoin is far more technically secure while trading above its 200-period moving average, around the $10,550 level. Interestingly, the Ichimoku indicator on the four-hour time frame is showing that Bitcoin could stage a significant rally if bulls can clear the $10,975 resistance level.
*The technicals are showing that Bitcoin could stage a significant upside rally if bulls can break through the $11,100 level this week*
SENTIMENT
Intraday bullish sentiment for Bitcoin has improved, at 50.53%, according to data from TheTIE.io – while the long-term sentiment indicator has increased, to 69.70% positive.
UPSIDE POTENTIAL
The upside for Bitcoin is likely increase significantly if bulls can force the price above the $11,100 level this week and actually keep it above this level. The lower time frames are currently suggesting that Bitcoin could head towards the $11,700 level, due to the formation of a bullish inverted head and shoulders pattern.
The neckline of the bullish pattern is located around the $10,600 level and suggests a move of at least $1,000 higher. It is also worth noting that sellers’ inability to break the July monthly trading low during last weeks sell-off, has created an extremely bullish triple-bottom pattern formation on the daily time frame.
Key near-term technical resistance for the BTC/USD pair prior to the $11,100 level is located at the $10,893 and the $10,975 levels.
DOWNSIDE POTENTIAL
The downside for Bitcoin is likely to come into focus this week if we see sustained weakness and multiple-daily price closes beneath the $10,000 level. The two key trading lows beneath the $10,000 level that bears must break this week are currently located at the $9,730 and $9,480 levels.
In the near-term, key technical support for the BTC/USD pair is currently located at the $10,391 and $10,197 levels. The RSI indicator on the daily time frame is still technically bearish, despite the recent pick-up in buying activity this morning.
A full version of Nathan Batchelor’s Daily Bitcoin Commentary, together with his calls, is available to SIMETRI Research subscribers earlier in the day.
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