BTCUSD unable to break through key resistance level
Bitcoin/US Dollar Index (BTCUSD) Technical Analysis Report for Oct 16, 2020 | by Techniquant Editorial Team
BTCUSD ended the week -0.43% lower at 11326.25 after losing $182.06 (-1.58%) today. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (BTCUSD as at Oct 16, 2020):
Friday's trading range has been $320.46 (2.78%), that's slightly above the last trading month's daily average range of $270.33. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for BTCUSD. Prices continued to consolidate within a tight trading range between 11223.99 and 11725.28 where it has been caught now for the whole last trading week.
In spite of a strong opening the cryptocurrency closed below the previous day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on October 6th, BTCUSD actually gained 0.65% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 11173.88 (S1). Unable to break through the key technical resistance level at 11533.93 (R1), Bitcoin closed below it after spiking up to 11545.35 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. After having been unable to move lower than 11269.05 in the prior session, BTC/USD found buyers again around the same price level today at 11224.89.
The market shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Buying could speed up should prices move above the close-by swing high at 11607.59 where further buy stops might get activated. Selling could accelerate should prices move below the nearby swing low at 11223.99 where further sell stops might get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Engulfing Candle" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for BTC/USD. Out of 241 times, BTCUSD closed higher 53.94% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 60.58% with an average market move of 6.33%.
With six out of the other six Major Cryptocurrencies closing lower today, the ones that stand out on the negative side are BCHUSD losing -4.53% and LTCUSD closing -3.88% lower. None of the markets managed to end the day in the green. Looking at the Minor Cryptocurrencies, the winners of the day have been WAVESBTC surging 11.31% and WAVESUSD closing 9.26% higher. The worst performers of the day have been ZECUSD tanking -8.25% and XMRUSD closing -7.19% lower. Read more