crypto

Review – After the Elon Musk Crypto Crash, Will Markets Go Back Up?

Digitex
• Dave Reiter
May 19, 2021

On February 8, the Bitcoin (BTC) community received incredibly bullish news when Tesla CEO, Elon Musk announced that his company had purchased $1.5 billion worth of BTC. In the same press release, Musk also revealed that the company would accept BTC as a method of payment for its Tesla automobiles. Immediately following the press release, the price of BTC exploded to the upside, gaining $6,881 (Chart #1).

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 1

The announcement by Musk marked the beginning of a massive rally in Bitcoin. Over the course of the next two months, BTC increased 73%.  

Elon Musk quickly became one of the biggest supporters of the Bitcoin ecosystem. Of course, the entire crypto community was more than happy to embrace Musk as its newest member of the “family.” In addition to being CEO of Tesla, he is the wealthiest person on the planet. In fact, Tesla’s purchase of BTC was the major contributing factor to catapulting Musk ahead of Jeff Bezos as the world’s wealthiest person. Therefore, Musk was viewed as the perfect ambassador for the Bitcoin community.

Unfortunately, the happy relationship between Musk and the crypto community was short-lived. What happened? Why did Elon Musk suddenly withdraw his endorsement of the Bitcoin ecosystem? More importantly, how will this affect the future direction of Bitcoin along with the entire cryptocurrency universe? Let’s discuss the details.

Elon Musk Abruptly Changes His View on Bitcoin     

Elon Musk is one of the greatest entrepreneurs in modern American history. Musk rose to fame in the late 1990s during the internet mania, as one of the original founders of PayPal. Over the course of the past two decades, he has been responsible for creating a number of highly successful business ventures.

Musk is most famously known for his affiliation with Tesla, which was launched in July 2003. In addition to Tesla, Musk is also involved in the Boring Company and SpaceX. As mentioned, his entrepreneurial success recently turned Musk into the wealthiest person on the planet, according to Forbes Magazine.      

Over the course of the past few years, he has received an increasing amount of scrutiny from various environmental groups concerning Tesla’s commitment to producing energy-efficient vehicles. Additionally, the company’s automobile plants are closely monitored by several third parties in an effort to determine if Tesla is maintaining an eco-friendly working environment. Tesla promotes itself as an industry leader in using renewable energy to operate its manufacturing facilities. This probably explains why the company is constantly critiqued and observed by independent agencies.     

Bitcoin has come under frequent and repeated attack by a number of environmentally-friendly research groups concerning its potential damage to the environment, particularly as it relates to Bitcoin mining. These research groups claim that the Bitcoin mining process consumes a great deal of non-renewable energy and emits an ever-increasing amount of carbon into the atmosphere. They question whether Bitcoin’s damage to the environment is outweighed by its benefit as a long-term store of value. This has been an ongoing debate between Bitcoiners and environmental groups for the past few years. However, the debate has certainly intensified during the past few months.

This brings us back to Elon Musk and his endorsement of Bitcoin. Given the fact that Tesla is currently struggling with its own environmental issues, Elon and his inner circle of advisors probably determined that Tesla’s involvement with Bitcoin was a poorly-timed decision. Most likely, this explains why Musk withdrew his support of BTC as a medium of exchange.

Musk released his now-famous tweet on May 12, in which he tweeted that Tesla would no longer accept Bitcoin as a method of payment for its automobiles.

Musk cited “environmental concerns” as the reason why Tesla suspended its acceptance of Bitcoin. Immediately upon the release of Elon’s tweet, the price of BTC quickly began to roll over to the downside. By the end of the day, BTC had lost 9.5% of its value.

BTC continued to drop for the next three days, as Musk released a few additional negative comments about Bitcoin and many analysts are wondering if the bottom is in yet, after BTC briefly dove below $40,000 on May 19. So, where do we go from here? In order to answer this question, let’s examine Bitcoin based on technical analysis.

Analyzing Bitcoin Based on Technical Analysis

Bitcoin peaked @ 64,789 on April 14. During the past four weeks, BTC had dropped by more than 34% (Chart #2), only to tumble even lower below the $40,000 mark on May 19.

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 2

How does this sell-off compare with declines from other bull market cycles? Let’s analyze the most recent bull market cycle from 2017. BTC generated a dramatic rally in the second half of 2017, advancing 570% from September through December. However, Bitcoin also experienced two sharp declines of 39.7% and 30.0%, respectively (Chart #3).

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 3

Even though the current decline is certainly painful for the Bitcoin bulls, it is quite normal when compared to other historical downturns.

Despite the current decline, the daily chart pattern for Bitcoin continues to remain bullish. The first sign of trouble for the bulls would be a weekly close below 37,409 (Chart #4). The BTC chart pattern will turn decidedly bearish if 37,409 is penetrated on a weekly closing basis.      

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 4  

In terms of the hourly chart, the bears are in control. In order to reverse the bearish momentum, the bulls need a daily close above 59,696 (Chart #5). The most likely scenario over the course of the next few weeks is a trading range.

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 5

BTC could easily remain locked in a trading range for the next several weeks. The important numbers to watch are 37,409 and 59,696.

Analyzing Ethereum Based on Technical Analysis

Although Bitcoin has garnered the majority of media attention during the past few days, Elon’s comments have wreaked havoc on the entire cryptocurrency universe. Almost all coins and tokens have suffered brutal declines. Let’s briefly review Ethereum (ETH) from a technical perspective.

Prior to the Tesla news, ETH was in the middle of a dramatic rally dating back to the pandemic low in March 2020. ETH recorded a major low on 13 March 2020 @ 89.50. The cryptocurrency preceded to rally 4,783% during the next 14 months, reaching its peak on 12 May @ 4,370.76.

The very next day, Elon Musk released his tweet concerning Tesla’s plan to stop accepting Bitcoin. Although Elon’s tweet was not aimed directly at Ethereum, it nevertheless sparked a brutal sell-off in ETH. Within 72 hours, ETH had declined 28.2% (Chart #6).

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 6

In spite of the sharp decline, the Ethereum chart pattern remains persistently bullish. It would take a weekly close below 1,937 to flip the chart from bullish to bearish (Chart #7).

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 7

This type of price drop is certainly possible. However, it’s highly unlikely. Going forward, ETH will most likely remain in a trading range for the next several weeks, as it consolidates the recent sharp decline.

As long as the price stays above 1,937, ETH should easily create a new all-time high above 4,370 by the end of 2021.

All Signs Point to Higher Crypto Prices

It’s very easy for crypto traders and investors to become fixated on short-term fluctuations in the crypto markets. Many traders (particularly novice traders) have a tendency to focus only on the negative crypto news while ignoring the long-term bullish outlook.

Bitcoin, Ethereum and other cryptocurrencies have received a tremendous amount of bullish news during the past several months, particularly at the institutional level. A wave of institutional money has flooded into the crypto universe during the past nine months. This is extremely bullish from a “big picture” multi-year perspective.

While it’s certainly possible that Bitcoin and other cryptocurrencies could experience another sharp leg to the downside, this won’t change the bullish outlook from a long-term global perspective. Cryptocurrencies are in the early stages of completely disrupting industries that have been in existence for hundreds of years. There will be several bumps along the way (e.g. Elon Musk’s tweets). However, investors who can tolerate the short-term volatility will be rewarded with long-term success.

 Digitex writers and/or guest authors may or may not have a vested interest in the Digitex project and/or other businesses mentioned throughout the site. None of the content on Digitex is investment advice nor is it a replacement for advice from a certified financial planner.

May 19, 2021
Digitex

Review – After the Elon Musk Crypto Crash, Will Markets Go Back Up?

Dave Reiter
crypto

On February 8, the Bitcoin (BTC) community received incredibly bullish news when Tesla CEO, Elon Musk announced that his company had purchased $1.5 billion worth of BTC. In the same press release, Musk also revealed that the company would accept BTC as a method of payment for its Tesla automobiles. Immediately following the press release, the price of BTC exploded to the upside, gaining $6,881 (Chart #1).

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 8

The announcement by Musk marked the beginning of a massive rally in Bitcoin. Over the course of the next two months, BTC increased 73%.  

Elon Musk quickly became one of the biggest supporters of the Bitcoin ecosystem. Of course, the entire crypto community was more than happy to embrace Musk as its newest member of the “family.” In addition to being CEO of Tesla, he is the wealthiest person on the planet. In fact, Tesla’s purchase of BTC was the major contributing factor to catapulting Musk ahead of Jeff Bezos as the world’s wealthiest person. Therefore, Musk was viewed as the perfect ambassador for the Bitcoin community.

Unfortunately, the happy relationship between Musk and the crypto community was short-lived. What happened? Why did Elon Musk suddenly withdraw his endorsement of the Bitcoin ecosystem? More importantly, how will this affect the future direction of Bitcoin along with the entire cryptocurrency universe? Let’s discuss the details.

Elon Musk Abruptly Changes His View on Bitcoin     

Elon Musk is one of the greatest entrepreneurs in modern American history. Musk rose to fame in the late 1990s during the internet mania, as one of the original founders of PayPal. Over the course of the past two decades, he has been responsible for creating a number of highly successful business ventures.

Musk is most famously known for his affiliation with Tesla, which was launched in July 2003. In addition to Tesla, Musk is also involved in the Boring Company and SpaceX. As mentioned, his entrepreneurial success recently turned Musk into the wealthiest person on the planet, according to Forbes Magazine.      

Over the course of the past few years, he has received an increasing amount of scrutiny from various environmental groups concerning Tesla’s commitment to producing energy-efficient vehicles. Additionally, the company’s automobile plants are closely monitored by several third parties in an effort to determine if Tesla is maintaining an eco-friendly working environment. Tesla promotes itself as an industry leader in using renewable energy to operate its manufacturing facilities. This probably explains why the company is constantly critiqued and observed by independent agencies.     

Bitcoin has come under frequent and repeated attack by a number of environmentally-friendly research groups concerning its potential damage to the environment, particularly as it relates to Bitcoin mining. These research groups claim that the Bitcoin mining process consumes a great deal of non-renewable energy and emits an ever-increasing amount of carbon into the atmosphere. They question whether Bitcoin’s damage to the environment is outweighed by its benefit as a long-term store of value. This has been an ongoing debate between Bitcoiners and environmental groups for the past few years. However, the debate has certainly intensified during the past few months.

This brings us back to Elon Musk and his endorsement of Bitcoin. Given the fact that Tesla is currently struggling with its own environmental issues, Elon and his inner circle of advisors probably determined that Tesla’s involvement with Bitcoin was a poorly-timed decision. Most likely, this explains why Musk withdrew his support of BTC as a medium of exchange.

Musk released his now-famous tweet on May 12, in which he tweeted that Tesla would no longer accept Bitcoin as a method of payment for its automobiles.

Musk cited “environmental concerns” as the reason why Tesla suspended its acceptance of Bitcoin. Immediately upon the release of Elon’s tweet, the price of BTC quickly began to roll over to the downside. By the end of the day, BTC had lost 9.5% of its value.

BTC continued to drop for the next three days, as Musk released a few additional negative comments about Bitcoin and many analysts are wondering if the bottom is in yet, after BTC briefly dove below $40,000 on May 19. So, where do we go from here? In order to answer this question, let’s examine Bitcoin based on technical analysis.

Analyzing Bitcoin Based on Technical Analysis

Bitcoin peaked @ 64,789 on April 14. During the past four weeks, BTC had dropped by more than 34% (Chart #2), only to tumble even lower below the $40,000 mark on May 19.

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 9

How does this sell-off compare with declines from other bull market cycles? Let’s analyze the most recent bull market cycle from 2017. BTC generated a dramatic rally in the second half of 2017, advancing 570% from September through December. However, Bitcoin also experienced two sharp declines of 39.7% and 30.0%, respectively (Chart #3).

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 10

Even though the current decline is certainly painful for the Bitcoin bulls, it is quite normal when compared to other historical downturns.

Despite the current decline, the daily chart pattern for Bitcoin continues to remain bullish. The first sign of trouble for the bulls would be a weekly close below 37,409 (Chart #4). The BTC chart pattern will turn decidedly bearish if 37,409 is penetrated on a weekly closing basis.      

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 11  

In terms of the hourly chart, the bears are in control. In order to reverse the bearish momentum, the bulls need a daily close above 59,696 (Chart #5). The most likely scenario over the course of the next few weeks is a trading range.

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 12

BTC could easily remain locked in a trading range for the next several weeks. The important numbers to watch are 37,409 and 59,696.

Analyzing Ethereum Based on Technical Analysis

Although Bitcoin has garnered the majority of media attention during the past few days, Elon’s comments have wreaked havoc on the entire cryptocurrency universe. Almost all coins and tokens have suffered brutal declines. Let’s briefly review Ethereum (ETH) from a technical perspective.

Prior to the Tesla news, ETH was in the middle of a dramatic rally dating back to the pandemic low in March 2020. ETH recorded a major low on 13 March 2020 @ 89.50. The cryptocurrency preceded to rally 4,783% during the next 14 months, reaching its peak on 12 May @ 4,370.76.

The very next day, Elon Musk released his tweet concerning Tesla’s plan to stop accepting Bitcoin. Although Elon’s tweet was not aimed directly at Ethereum, it nevertheless sparked a brutal sell-off in ETH. Within 72 hours, ETH had declined 28.2% (Chart #6).

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 13

In spite of the sharp decline, the Ethereum chart pattern remains persistently bullish. It would take a weekly close below 1,937 to flip the chart from bullish to bearish (Chart #7).

Review - After the Elon Musk Crypto Crash, Will Markets Go Back Up? 14

This type of price drop is certainly possible. However, it’s highly unlikely. Going forward, ETH will most likely remain in a trading range for the next several weeks, as it consolidates the recent sharp decline.

As long as the price stays above 1,937, ETH should easily create a new all-time high above 4,370 by the end of 2021.

All Signs Point to Higher Crypto Prices

It’s very easy for crypto traders and investors to become fixated on short-term fluctuations in the crypto markets. Many traders (particularly novice traders) have a tendency to focus only on the negative crypto news while ignoring the long-term bullish outlook.

Bitcoin, Ethereum and other cryptocurrencies have received a tremendous amount of bullish news during the past several months, particularly at the institutional level. A wave of institutional money has flooded into the crypto universe during the past nine months. This is extremely bullish from a “big picture” multi-year perspective.

While it’s certainly possible that Bitcoin and other cryptocurrencies could experience another sharp leg to the downside, this won’t change the bullish outlook from a long-term global perspective. Cryptocurrencies are in the early stages of completely disrupting industries that have been in existence for hundreds of years. There will be several bumps along the way (e.g. Elon Musk’s tweets). However, investors who can tolerate the short-term volatility will be rewarded with long-term success.

 Digitex writers and/or guest authors may or may not have a vested interest in the Digitex project and/or other businesses mentioned throughout the site. None of the content on Digitex is investment advice nor is it a replacement for advice from a certified financial planner.

Latest News

trading

The Pros and Cons of Crypto Investing and Trading

Trading
Cryptocurrency
• Digitex
May 5, 2021

Wondering how to capitalize on the crypto bull market’s gains?

To achieve that, you can choose between two main methods: to invest in digital assets for the long run or day trade crypto to generate short-term profits.

In this article, we will explain the main differences between the two approaches while introducing the pros and cons of each.

What Are the Pros and Cons of Long-Term Crypto Investments?

One of the easiest ways to gain exposure to the crypto market is by investing in digital assets for the long term.

With this strategy, you buy and hold cryptocurrencies for at least several months (or even multiple years) and later sell them for a profit after their prices have increased to a satisfactory level.

While the investment approach doesn’t take short-term price movements into account, it requires investors to leverage fundamental analysis, in which they carefully research digital assets to select the most promising ones.

Since crypto investing is a long-term strategy, it comes with only a few monthly or yearly trades, which can save you time as well as provide tax benefits in some jurisdictions. For the same reason, less paperwork is required to report investment-related income.

Also, it’s easier for beginners to get started as they don’t have to learn how to use various technical analysis tools and implement them into their crypto trading strategies.

Moreover, investment strategies like dollar-cost averaging (DCA) – in which one invests a fixed amount of funds in an asset at regular intervals (e.g., $100 on the first day of each month throughout a year) – can remove the extra legwork needed for attempting to time the market.

On the flip side, investing for the long-term in crypto is not suitable for making regular or a full-time income.

While crypto investment is usually considered safer than day trading, you face higher risks with this strategy if you fail to research projects properly (or if you don’t do any research).

Furthermore, while you can make a decent income in the long run with this strategy, crypto investors usually miss out on multiple short-term profit-making opportunities.

What Are the Pros and Cons of Day Trading Crypto?

Unlike investing, day trading crypto involves entering and exiting positions more frequently with the goal to generate profits on short-term price movements.

For that reason, this approach requires increased time to monitor markets, especially if you are using a high-frequency trading strategy like scalping.

On the other hand, unlike with investing, you can leverage day trading to capitalize on short-term opportunities to make profits.

And, if you are a successful trader, you can even use this strategy to generate regular, potentially full-time, revenue.

Instead of fundamental analysis, traders incorporate multiple technical analysis tools and indicators into their crypto trading strategies to study trends as well as identify and interpret signals.

For that reason, mastering day trading is often a more challenging task than learning how to invest in cryptocurrency in the long run.

Unlike investors who can just wait out short periods of volatility, traders are more affected by emotions like fear, greed, and hope, which often influence their decisions negatively.

Day trading usually involves more risks than long-term holding, so it’s crucial for traders to learn how to manage and minimize them to maintain profitable trades.

That said, with effective risk management and the ability to keep your emotions under control, day trading crypto can become a lucrative strategy to capitalize on the rising digital asset market.

On top of that, day traders can amplify their gains from successful trades by trading Bitcoin with leverage.

Invest and Trade Crypto on Digitex

Both investing and day trading are viable approaches to gain exposure to the fast-growing digital asset market.

While investment focuses on generating long-term revenue, day trading aims to capture profits from numerous short-term trades.

In addition to its Bitcoin futures exchange, the next-generation crypto trading platform Digitex has recently opened access for its users to spot markets as well.

As a result, you can now leverage both investing and day trading strategies to generate potential profits on cryptocurrencies on Digitex.

Oh, and we almost forgot to mention: since Digitex completely eliminates trading fees, you can keep 100% of your profits on the platform.

Sounds fantastic, right?

Open an account at Digitex now!

May 5, 2021
Trading
Cryptocurrency

The Pros and Cons of Crypto Investing and Trading

Digitex
trading

Wondering how to capitalize on the crypto bull market’s gains?

To achieve that, you can choose between two main methods: to invest in digital assets for the long run or day trade crypto to generate short-term profits.

In this article, we will explain the main differences between the two approaches while introducing the pros and cons of each.

What Are the Pros and Cons of Long-Term Crypto Investments?

One of the easiest ways to gain exposure to the crypto market is by investing in digital assets for the long term.

With this strategy, you buy and hold cryptocurrencies for at least several months (or even multiple years) and later sell them for a profit after their prices have increased to a satisfactory level.

While the investment approach doesn’t take short-term price movements into account, it requires investors to leverage fundamental analysis, in which they carefully research digital assets to select the most promising ones.

Since crypto investing is a long-term strategy, it comes with only a few monthly or yearly trades, which can save you time as well as provide tax benefits in some jurisdictions. For the same reason, less paperwork is required to report investment-related income.

Also, it’s easier for beginners to get started as they don’t have to learn how to use various technical analysis tools and implement them into their crypto trading strategies.

Moreover, investment strategies like dollar-cost averaging (DCA) – in which one invests a fixed amount of funds in an asset at regular intervals (e.g., $100 on the first day of each month throughout a year) – can remove the extra legwork needed for attempting to time the market.

On the flip side, investing for the long-term in crypto is not suitable for making regular or a full-time income.

While crypto investment is usually considered safer than day trading, you face higher risks with this strategy if you fail to research projects properly (or if you don’t do any research).

Furthermore, while you can make a decent income in the long run with this strategy, crypto investors usually miss out on multiple short-term profit-making opportunities.

What Are the Pros and Cons of Day Trading Crypto?

Unlike investing, day trading crypto involves entering and exiting positions more frequently with the goal to generate profits on short-term price movements.

For that reason, this approach requires increased time to monitor markets, especially if you are using a high-frequency trading strategy like scalping.

On the other hand, unlike with investing, you can leverage day trading to capitalize on short-term opportunities to make profits.

And, if you are a successful trader, you can even use this strategy to generate regular, potentially full-time, revenue.

Instead of fundamental analysis, traders incorporate multiple technical analysis tools and indicators into their crypto trading strategies to study trends as well as identify and interpret signals.

For that reason, mastering day trading is often a more challenging task than learning how to invest in cryptocurrency in the long run.

Unlike investors who can just wait out short periods of volatility, traders are more affected by emotions like fear, greed, and hope, which often influence their decisions negatively.

Day trading usually involves more risks than long-term holding, so it’s crucial for traders to learn how to manage and minimize them to maintain profitable trades.

That said, with effective risk management and the ability to keep your emotions under control, day trading crypto can become a lucrative strategy to capitalize on the rising digital asset market.

On top of that, day traders can amplify their gains from successful trades by trading Bitcoin with leverage.

Invest and Trade Crypto on Digitex

Both investing and day trading are viable approaches to gain exposure to the fast-growing digital asset market.

While investment focuses on generating long-term revenue, day trading aims to capture profits from numerous short-term trades.

In addition to its Bitcoin futures exchange, the next-generation crypto trading platform Digitex has recently opened access for its users to spot markets as well.

As a result, you can now leverage both investing and day trading strategies to generate potential profits on cryptocurrencies on Digitex.

Oh, and we almost forgot to mention: since Digitex completely eliminates trading fees, you can keep 100% of your profits on the platform.

Sounds fantastic, right?

Open an account at Digitex now!

Latest News

Ethereum

The Future Price of Ethereum — Technical Analysis

Digitex Futures
• Dave Reiter
April 12, 2021

Similar to other coins and tokens, Ethereum has generated a substantial rally throughout the past six months. Specifically, ETH has increased 498%, outperforming BTC by approximately 60% during the same time period (see chart 1 below). So, where do we go from here? How will ETH perform for the remainder of 2021 and beyond? Let’s explore the details.

The Future Price of Ethereum — Technical Analysis 15

The Difference Between Ethereum and Ether

In terms of market capitalization, ETH is the second-largest cryptocurrency in the crypto universe. Only Bitcoin has a larger market capitalization. ETH has enjoyed some explosive price moves throughout its brief 6-year history. But, before we analyze the future price direction of ETH, let’s briefly discuss the difference between Ethereum and Ether.

There seems to be some confusion regarding these two crypto terms. Ethereum is a blockchain-based platform used for writing autonomous smart contracts and decentralized applications. Ether is the cryptocurrency that serves as the fuel to power the smart contracts, apps, and other transactions on the Ethereum blockchain.

Although most people in the crypto community (including many crypto websites) use these words interchangeably, they are actually quite different in terms of how they are used in the crypto ecosystem.

Use Cases for Ethereum Blockchain Continue to Expand

In this article, we will be analyzing the price direction of Ether (ETH), the cryptocurrency. However, it’s also important to discuss Ethereum, the blockchain, because it lays the foundation for the current ETH bull market. It seems almost impossible to believe that Ether was trading below $100 per token less than 15 months ago (see chart 2).

The Future Price of Ethereum — Technical Analysis 16

Over the course of the past 15 months, ETH has exploded to the upside by increasing 2,226%. Since March 2020, ETH has been one of the top-performing cryptocurrencies within the entire crypto universe. Ether easily outperformed Bitcoin during this particular time period, 2,226% versus 1,388%.

The majority of Ether’s gains can be attributed to the fact that the total number of use cases for the Ethereum blockchain has increased substantially. Unlike the Bitcoin blockchain, Ethereum can be used for multiple applications across a wide variety of industries. Several of these applications have evolved into legitimate and profitable business enterprises with exponential growth potential. Let’s briefly examine a few of these Ethereum-based businesses.

DeFi (Decentralized Finance)

Without question, the most exciting new business linked to Ethereum is decentralized finance, more commonly known as DeFi. Although DeFi has been in existence for less than four years, it has gained an incredible amount of interest from venture capital firms and angel investors who see the enormous potential in this new space.

Without going into great detail, DeFi competes head-to-head with the legacy financial services industry, with an estimated value of $26.5 trillion by 2022, according to data gathered by The World Bank. Based on these numbers, the upside potential in DeFi is massive. This is great news if you are an owner of ETH because the overwhelming majority of the DeFi ecosystem operates on the Ethereum blockchain.

NFTs (Non-Fungible Tokens)

Another business venture associated with Ethereum is non-fungible tokens (NFT), which have witnessed a tremendous wave of enthusiasm from investors and speculators during the past few months. Very briefly, non-fungible tokens allow non-fungible assets to possess unique properties that completely change the user and development relationship of these assets.

Examples of non-fungible digital assets include digital collectibles, such as in-game items and characters, virtual pets, and representations of fine art. By attaching unique properties such as immutability and scarcity to non-fungible assets, it substantially increases the value of said assets.

Almost the entire NFT industry operates on the Ethereum blockchain, which is obviously bullish for ETH. Arguably, the most exciting part of NFTs is the fact that young people are heavily involved in this exciting new space. Consequently, this will provide Generation Z with an opportunity to familiarize themselves with cryptocurrencies and other digital assets. This is very bullish from a long-term perspective.

In addition to DeFi and NFT, the Ethereum blockchain is also actively engaged in enterprise software, which is used by organizations, businesses, charities, schools, and governments to handle day-to-day operations across a wide variety of internal departments within each organization.

These daily operations would include such tasks as human resources, supply chain management, database management, CRM, security, and billing systems. Enterprise software companies are using a privatized version of the Ethereum network to provide their services to companies like Microsoft, IBM, JPMorgan Chase, and Deloitte.

These are just a few examples of how the Ethereum blockchain is linked to industries and businesses across the global economy. Of course, this is extremely bullish for ETH because these companies and businesses must purchase ETH in order to pay for their services on the Ethereum blockchain. Many crypto experts believe that the number of use cases for Ethereum will continue to expand as blockchain technology becomes more common throughout the global economy.

Using TA to Forecast the Price of ETH

Technical analysis has been extremely useful in forecasting the future price direction of ETH. Let’s review a few of these indicators.

Arguably, the most reliable technical indicator in modern history was created by a twelfth-century Italian mathematician by the name of Leonardo Fibonacci. The vast majority of mathematical historians consider Fibonacci to be the greatest mathematician of the Middle Ages. In fact, many experts in the field of mathematics claim that Fibonacci was one of the ten greatest mathematicians of all time.

Fibonacci made several important contributions to the field of mathematics throughout his life. However, he will always be most famously known for Fibonacci numbers, which are a sequence of numbers developed by Fibonacci circa 1202.

Fibonacci numbers are used in the study of nature, music, agriculture, computer applications, price forecasting, and several other fields of study. Stock and commodity traders use “Fib” numbers to calculate support and resistance levels.

The most common Fib levels are:

  • .236
  • .382
  • .500
  • .618
  • .786
  • 000

It’s not uncommon for financial assets like cryptocurrencies to fluctuate between Fibonacci support and resistance levels for long periods of time. When a major breakout finally occurs, it usually marks the beginning of a substantial move.

The crypto trading community would love to know the final top in ETH before a new bear market ensues, probably near the end of 2021 or early-2022. Of course, it’s impossible to accurately forecast the final top of any speculative asset. Cryptocurrencies are particularly difficult because we have such a small sample size of historical data. However, we can use Fibonacci numbers to develop an educated forecast concerning the final top for Ether. Please review the calculation on Chart 3 below:

The Future Price of Ethereum — Technical Analysis 17

There are several different ways to use Fib levels as a forecasting device. The most popular format involves calculating the price difference between two important price levels. For this particular calculation, we selected the historic high from January 2018 and the subsequent low achieved in December of the same year.

The majority of Fibonacci experts agree that .618 is the most significant Fib level. Therefore, we will use this number in our calculation. Based on the Fibonacci calculation, the final top for this cycle will be 4,921.73. If ETH follows the same path as the 2017 bull market, the top will occur in late-2021.

Another useful technical indicator is the Relative Strength Index (RSI), which was created by J Welles Wilder Jr, one of the greatest technical analysts in the history of financial markets. RSI is a momentum indicator that measures the overbought or oversold condition of a speculative asset. RSI is typically displayed in an oscillator format, which fluctuates between 0 and 100.

Generally speaking, a market is considered overbought if the RSI reading exceeds 70. Conversely, the market is considered oversold if the RSI reading falls below 30. Many traders will use a reading above 70 as a trigger to generate a sell signal and a reading below 30 will generate a buy signal. However, this is not a good strategy to follow in a momentum-fueled environment like cryptocurrencies. Please review Chart number 4:

The Future Price of Ethereum — Technical Analysis 18

The RSI reading has been above 70 since November 9, 2020, when ETH was trading @ 446.10. Obviously, this was not a good time to sell ETH. In fact, this would have been a great time to buy Ether. Therefore, an argument could be made that the optimum way to use RSI for trending markets like cryptocurrencies is to wait for a bullish breakout above 70 as a buy signal. A bearish breakout below 30 would constitute a sell signal. Trying to pick tops and bottoms in a trending market is a recipe for disaster. As Chart #4 clearly demonstrates, the best course of action is to follow the momentum.

In addition to RSI, another momentum-based indicator is the Money Flow Index (MFI). This indicator measures the inflow and outflow of money into a speculative asset over a specific period of time. It uses price and volume to calculate trading pressure. Arguably, MFI is the purest way to determine the amount of money entering and leaving a particular asset class.

Similar to RSI, the index fluctuates between 0 and 100. In terms of trending markets like cryptocurrencies, the best way to apply MFI is to wait for a bullish breakout above 70 or a bearish breakout below 30. MFI is located at the bottom of Chart #5.

The Future Price of Ethereum — Technical Analysis 19

An Ether buy signal was generated @ 509.11 on November 23, 2020, when MFI penetrated the 70 level. MFI has been continuously above 70 for the past five months. This is a perfect example of why it’s best to follow the trend of the market and avoid the temptation to pick a top or bottom.

At least for now, the trend of ETH is clearly in favor of the bulls. The vast majority of technical indicators are forecasting a continuation of the bull market. In addition to technical analysis, the fundamental backdrop for Ether is extremely bullish, as more use cases are being added to the Ethereum blockchain. Eventually, this bullish cycle will end and a new bear cycle will begin. However, this current bullish phase could easily continue for the remainder of 2021.

Don’t forget that whether the price of ETH goes up or down, you can make money trading ETH futures on our zero-fee rapid-fire ladder trading platform. Sign up here to find out how easy it is to profit from even the smallest of price fluctuations when you’re not constantly losing out to commissions. 

Digitex Futures writers and/or guest authors may or may not have a vested interest in the Digitex Futures project and/or other businesses mentioned throughout the site. None of the content on Digitex Futures is investment advice nor is it a replacement for advice from a certified financial planner.

April 12, 2021
Digitex Futures

The Future Price of Ethereum — Technical Analysis

Dave Reiter
Ethereum

Similar to other coins and tokens, Ethereum has generated a substantial rally throughout the past six months. Specifically, ETH has increased 498%, outperforming BTC by approximately 60% during the same time period (see chart 1 below). So, where do we go from here? How will ETH perform for the remainder of 2021 and beyond? Let’s explore the details.

The Future Price of Ethereum — Technical Analysis 20

The Difference Between Ethereum and Ether

In terms of market capitalization, ETH is the second-largest cryptocurrency in the crypto universe. Only Bitcoin has a larger market capitalization. ETH has enjoyed some explosive price moves throughout its brief 6-year history. But, before we analyze the future price direction of ETH, let’s briefly discuss the difference between Ethereum and Ether.

There seems to be some confusion regarding these two crypto terms. Ethereum is a blockchain-based platform used for writing autonomous smart contracts and decentralized applications. Ether is the cryptocurrency that serves as the fuel to power the smart contracts, apps, and other transactions on the Ethereum blockchain.

Although most people in the crypto community (including many crypto websites) use these words interchangeably, they are actually quite different in terms of how they are used in the crypto ecosystem.

Use Cases for Ethereum Blockchain Continue to Expand

In this article, we will be analyzing the price direction of Ether (ETH), the cryptocurrency. However, it’s also important to discuss Ethereum, the blockchain, because it lays the foundation for the current ETH bull market. It seems almost impossible to believe that Ether was trading below $100 per token less than 15 months ago (see chart 2).

The Future Price of Ethereum — Technical Analysis 21

Over the course of the past 15 months, ETH has exploded to the upside by increasing 2,226%. Since March 2020, ETH has been one of the top-performing cryptocurrencies within the entire crypto universe. Ether easily outperformed Bitcoin during this particular time period, 2,226% versus 1,388%.

The majority of Ether’s gains can be attributed to the fact that the total number of use cases for the Ethereum blockchain has increased substantially. Unlike the Bitcoin blockchain, Ethereum can be used for multiple applications across a wide variety of industries. Several of these applications have evolved into legitimate and profitable business enterprises with exponential growth potential. Let’s briefly examine a few of these Ethereum-based businesses.

DeFi (Decentralized Finance)

Without question, the most exciting new business linked to Ethereum is decentralized finance, more commonly known as DeFi. Although DeFi has been in existence for less than four years, it has gained an incredible amount of interest from venture capital firms and angel investors who see the enormous potential in this new space.

Without going into great detail, DeFi competes head-to-head with the legacy financial services industry, with an estimated value of $26.5 trillion by 2022, according to data gathered by The World Bank. Based on these numbers, the upside potential in DeFi is massive. This is great news if you are an owner of ETH because the overwhelming majority of the DeFi ecosystem operates on the Ethereum blockchain.

NFTs (Non-Fungible Tokens)

Another business venture associated with Ethereum is non-fungible tokens (NFT), which have witnessed a tremendous wave of enthusiasm from investors and speculators during the past few months. Very briefly, non-fungible tokens allow non-fungible assets to possess unique properties that completely change the user and development relationship of these assets.

Examples of non-fungible digital assets include digital collectibles, such as in-game items and characters, virtual pets, and representations of fine art. By attaching unique properties such as immutability and scarcity to non-fungible assets, it substantially increases the value of said assets.

Almost the entire NFT industry operates on the Ethereum blockchain, which is obviously bullish for ETH. Arguably, the most exciting part of NFTs is the fact that young people are heavily involved in this exciting new space. Consequently, this will provide Generation Z with an opportunity to familiarize themselves with cryptocurrencies and other digital assets. This is very bullish from a long-term perspective.

In addition to DeFi and NFT, the Ethereum blockchain is also actively engaged in enterprise software, which is used by organizations, businesses, charities, schools, and governments to handle day-to-day operations across a wide variety of internal departments within each organization.

These daily operations would include such tasks as human resources, supply chain management, database management, CRM, security, and billing systems. Enterprise software companies are using a privatized version of the Ethereum network to provide their services to companies like Microsoft, IBM, JPMorgan Chase, and Deloitte.

These are just a few examples of how the Ethereum blockchain is linked to industries and businesses across the global economy. Of course, this is extremely bullish for ETH because these companies and businesses must purchase ETH in order to pay for their services on the Ethereum blockchain. Many crypto experts believe that the number of use cases for Ethereum will continue to expand as blockchain technology becomes more common throughout the global economy.

Using TA to Forecast the Price of ETH

Technical analysis has been extremely useful in forecasting the future price direction of ETH. Let’s review a few of these indicators.

Arguably, the most reliable technical indicator in modern history was created by a twelfth-century Italian mathematician by the name of Leonardo Fibonacci. The vast majority of mathematical historians consider Fibonacci to be the greatest mathematician of the Middle Ages. In fact, many experts in the field of mathematics claim that Fibonacci was one of the ten greatest mathematicians of all time.

Fibonacci made several important contributions to the field of mathematics throughout his life. However, he will always be most famously known for Fibonacci numbers, which are a sequence of numbers developed by Fibonacci circa 1202.

Fibonacci numbers are used in the study of nature, music, agriculture, computer applications, price forecasting, and several other fields of study. Stock and commodity traders use “Fib” numbers to calculate support and resistance levels.

The most common Fib levels are:

  • .236
  • .382
  • .500
  • .618
  • .786
  • 000

It’s not uncommon for financial assets like cryptocurrencies to fluctuate between Fibonacci support and resistance levels for long periods of time. When a major breakout finally occurs, it usually marks the beginning of a substantial move.

The crypto trading community would love to know the final top in ETH before a new bear market ensues, probably near the end of 2021 or early-2022. Of course, it’s impossible to accurately forecast the final top of any speculative asset. Cryptocurrencies are particularly difficult because we have such a small sample size of historical data. However, we can use Fibonacci numbers to develop an educated forecast concerning the final top for Ether. Please review the calculation on Chart 3 below:

The Future Price of Ethereum — Technical Analysis 22

There are several different ways to use Fib levels as a forecasting device. The most popular format involves calculating the price difference between two important price levels. For this particular calculation, we selected the historic high from January 2018 and the subsequent low achieved in December of the same year.

The majority of Fibonacci experts agree that .618 is the most significant Fib level. Therefore, we will use this number in our calculation. Based on the Fibonacci calculation, the final top for this cycle will be 4,921.73. If ETH follows the same path as the 2017 bull market, the top will occur in late-2021.

Another useful technical indicator is the Relative Strength Index (RSI), which was created by J Welles Wilder Jr, one of the greatest technical analysts in the history of financial markets. RSI is a momentum indicator that measures the overbought or oversold condition of a speculative asset. RSI is typically displayed in an oscillator format, which fluctuates between 0 and 100.

Generally speaking, a market is considered overbought if the RSI reading exceeds 70. Conversely, the market is considered oversold if the RSI reading falls below 30. Many traders will use a reading above 70 as a trigger to generate a sell signal and a reading below 30 will generate a buy signal. However, this is not a good strategy to follow in a momentum-fueled environment like cryptocurrencies. Please review Chart number 4:

The Future Price of Ethereum — Technical Analysis 23

The RSI reading has been above 70 since November 9, 2020, when ETH was trading @ 446.10. Obviously, this was not a good time to sell ETH. In fact, this would have been a great time to buy Ether. Therefore, an argument could be made that the optimum way to use RSI for trending markets like cryptocurrencies is to wait for a bullish breakout above 70 as a buy signal. A bearish breakout below 30 would constitute a sell signal. Trying to pick tops and bottoms in a trending market is a recipe for disaster. As Chart #4 clearly demonstrates, the best course of action is to follow the momentum.

In addition to RSI, another momentum-based indicator is the Money Flow Index (MFI). This indicator measures the inflow and outflow of money into a speculative asset over a specific period of time. It uses price and volume to calculate trading pressure. Arguably, MFI is the purest way to determine the amount of money entering and leaving a particular asset class.

Similar to RSI, the index fluctuates between 0 and 100. In terms of trending markets like cryptocurrencies, the best way to apply MFI is to wait for a bullish breakout above 70 or a bearish breakout below 30. MFI is located at the bottom of Chart #5.

The Future Price of Ethereum — Technical Analysis 24

An Ether buy signal was generated @ 509.11 on November 23, 2020, when MFI penetrated the 70 level. MFI has been continuously above 70 for the past five months. This is a perfect example of why it’s best to follow the trend of the market and avoid the temptation to pick a top or bottom.

At least for now, the trend of ETH is clearly in favor of the bulls. The vast majority of technical indicators are forecasting a continuation of the bull market. In addition to technical analysis, the fundamental backdrop for Ether is extremely bullish, as more use cases are being added to the Ethereum blockchain. Eventually, this bullish cycle will end and a new bear cycle will begin. However, this current bullish phase could easily continue for the remainder of 2021.

Don’t forget that whether the price of ETH goes up or down, you can make money trading ETH futures on our zero-fee rapid-fire ladder trading platform. Sign up here to find out how easy it is to profit from even the smallest of price fluctuations when you’re not constantly losing out to commissions. 

Digitex Futures writers and/or guest authors may or may not have a vested interest in the Digitex Futures project and/or other businesses mentioned throughout the site. None of the content on Digitex Futures is investment advice nor is it a replacement for advice from a certified financial planner.

Latest News

Digitex

Digitex Fundamentals Are Stronger Than Ever

Digitex Futures
• Ali Martinez
August 4, 2020

Following a successful launch event on Friday, July 31, word is getting out that the DGTX token is the only exchange token that offers a passport to zero-fee trading. With ringing endorsements from the crypto community, technical indicators show that DGTX has found a new higher support level. Several critical metrics also reveal that the price could climb even further this year, given what’s to come. 

Industry Leaders Give DFE Vote of Confidence

During Friday’s mega public launch event, several prominent figures in the cryptocurrency industry were outspoken in their support for Digitex, underscoring the solid fundamentals of the Digitex offering. Trader Cobb, a well-known technical analyst, affirmed that DFE’s ladder system brought something to the crypto space that was missing. He maintains that this platform gives professional traders the ability to use the right tools to profit from the cryptocurrency market.

“Digitex Futures Exchange has given us something that did not exist. I traded through the 2017-2018 boom. I have traded for 15 years now. I have traded the foreign exchange, bonds, commodities. I have ran funds. I have been involved in trading my whole life. The frustrating thing that I had through 2017-2018 was the lack of orders, the lack of professionalism as far as trading tools go. What Digitex Futures Exchange has replicated is fantastic, not just for me as a retail user, but it is really important to give professional traders the ability to use the right tools that they used to. When you trade futures in the S&P, you use a ladder. Digitex Futures Exchange has created a ladder for cryptos. I’m stoked. I’m bloody happy for what DFE has done,” said Cobb.

Along the same lines, Mika, a scalp trader and Digitex community member, said that Adam’s trading strategy is what made him a profitable trader. He affirmed that due to the success that he has had as a scalping trader, using DFE to implement this strategy is a no-brainer.

“I was trading horse racing bets on Betfair using [Adam’s] BetTrader trading ladder software and heard through a group of traders that you were opening a zero-fee exchange based on the same ladder interface. After hearing this news, I bought the first token of my life. I started trading on the DFE testnet and had a 60-day run without making a loss. I don’t care if I’m trading Bitcoin, bananas, or whatever else – scalping works with any medium,” affirmed Mika.

Meanwhile, Ready Set Crypto’s Doc Severson stated that he would personally have been happy if the DFE would have launched last year. But he admitted that, in light of the booming demand for crypto futures, now is the perfect timing given that the market readiness is there.

Sitting On Top Of Massive Support

So in light of the general enthusiasm for the DFE, what next for DGTX? IntoTheBlock’s “In/Out of the Money Around Price” (IOMAP) model reveals that in the event of a bullish impulse, the most significant resistance barrier ahead of this cryptocurrency sits between $0.094 and $0.097. Here, approximately 60 addresses had previously purchased over 63 million DGTX.

In some cases, a massive supply barrier could prevent further price traction. But if the buying pressure behind DGTX is significant enough, it may slice thought this resistance level and aim for new yearly highs.

In the case of DGTX, the IOMAP cohorts show that there are no major supply barriers ahead of the $0.095 mark that will prevent the price from surging towards $0.15 or higher.

Digitex Fundamentals Are Stronger Than Ever 25

Another Bull Run on the Way?

As positive sentiments among market participants began to run high in anticipation of the Digitex Futures Exchange official launch, DGTX entered a bull rally. The bullish momentum behind saw the price skyrocket nearly 250% between June 22 and July 27. The upswing was significant enough to push this cryptocurrency to a new yearly high of $0.123.

On July 29, only two days before the launch event, IntoTheBlock registered a significant spike in the volume of large transactions on the DGTX network. Roughly $2.66 million worth of this altcoin were transferred on this day alone. Despite weekend price volatility, two clear positive signals have emerged.

Firstly, DGTX has found a new critical support level, according to the Fibonacci retracement indicator. The 61.8% Fibonacci retracement level, which was previously acting as stiff resistance between June 2019 and July 2020, absorbed the price pressure and means DGTX is now seeing a healthy rebound.

Digitex Fundamentals Are Stronger Than Ever 26

Bouncing off this critical support level can be considered a bullish sign. The 61.8% Fibonacci retracement level is regarded by some of the most prominent technical analysts as the ‘golden’ retracement area. Thus, the recent drop to this hurdle could result in a further upward advance and may lead to new yearly highs.

The second positive indicator is that smaller investors have continued to rush to buy DGTX over recent days. Santiment’s holder distribution chart reveals that the number of addresses holding between 0.01 to 10,000,000 DGTX has surged since last week, helping to distribute DGTX over a broad base of investors.

Digitex Fundamentals Are Stronger Than Ever 27

From here, things are looking bright for Digitex. During Friday’s event, Adam teased some of what we can expect from Digitex over the coming year, with a new white paper and roadmap due out over the next month or so. With so much optimism around what Digitex Futures Exchange has to offer, it seems to be a matter of time before DGTX breaks above the overhead resistance and climbs to new higher highs.

With Ali’s analysis in mind, there has never been a better time to get your hands on some DGTX. As Adam said last week, you won’t see these prices again once all our plans are unveiled. Spread the word, and be there when DGTX reaches a new ATH! 

August 4, 2020
Digitex Futures

Digitex Fundamentals Are Stronger Than Ever

Ali Martinez
Digitex

Following a successful launch event on Friday, July 31, word is getting out that the DGTX token is the only exchange token that offers a passport to zero-fee trading. With ringing endorsements from the crypto community, technical indicators show that DGTX has found a new higher support level. Several critical metrics also reveal that the price could climb even further this year, given what’s to come. 

Industry Leaders Give DFE Vote of Confidence

During Friday’s mega public launch event, several prominent figures in the cryptocurrency industry were outspoken in their support for Digitex, underscoring the solid fundamentals of the Digitex offering. Trader Cobb, a well-known technical analyst, affirmed that DFE’s ladder system brought something to the crypto space that was missing. He maintains that this platform gives professional traders the ability to use the right tools to profit from the cryptocurrency market.

“Digitex Futures Exchange has given us something that did not exist. I traded through the 2017-2018 boom. I have traded for 15 years now. I have traded the foreign exchange, bonds, commodities. I have ran funds. I have been involved in trading my whole life. The frustrating thing that I had through 2017-2018 was the lack of orders, the lack of professionalism as far as trading tools go. What Digitex Futures Exchange has replicated is fantastic, not just for me as a retail user, but it is really important to give professional traders the ability to use the right tools that they used to. When you trade futures in the S&P, you use a ladder. Digitex Futures Exchange has created a ladder for cryptos. I’m stoked. I’m bloody happy for what DFE has done,” said Cobb.

Along the same lines, Mika, a scalp trader and Digitex community member, said that Adam’s trading strategy is what made him a profitable trader. He affirmed that due to the success that he has had as a scalping trader, using DFE to implement this strategy is a no-brainer.

“I was trading horse racing bets on Betfair using [Adam’s] BetTrader trading ladder software and heard through a group of traders that you were opening a zero-fee exchange based on the same ladder interface. After hearing this news, I bought the first token of my life. I started trading on the DFE testnet and had a 60-day run without making a loss. I don’t care if I’m trading Bitcoin, bananas, or whatever else – scalping works with any medium,” affirmed Mika.

Meanwhile, Ready Set Crypto’s Doc Severson stated that he would personally have been happy if the DFE would have launched last year. But he admitted that, in light of the booming demand for crypto futures, now is the perfect timing given that the market readiness is there.

Sitting On Top Of Massive Support

So in light of the general enthusiasm for the DFE, what next for DGTX? IntoTheBlock’s “In/Out of the Money Around Price” (IOMAP) model reveals that in the event of a bullish impulse, the most significant resistance barrier ahead of this cryptocurrency sits between $0.094 and $0.097. Here, approximately 60 addresses had previously purchased over 63 million DGTX.

In some cases, a massive supply barrier could prevent further price traction. But if the buying pressure behind DGTX is significant enough, it may slice thought this resistance level and aim for new yearly highs.

In the case of DGTX, the IOMAP cohorts show that there are no major supply barriers ahead of the $0.095 mark that will prevent the price from surging towards $0.15 or higher.

Digitex Fundamentals Are Stronger Than Ever 28

Another Bull Run on the Way?

As positive sentiments among market participants began to run high in anticipation of the Digitex Futures Exchange official launch, DGTX entered a bull rally. The bullish momentum behind saw the price skyrocket nearly 250% between June 22 and July 27. The upswing was significant enough to push this cryptocurrency to a new yearly high of $0.123.

On July 29, only two days before the launch event, IntoTheBlock registered a significant spike in the volume of large transactions on the DGTX network. Roughly $2.66 million worth of this altcoin were transferred on this day alone. Despite weekend price volatility, two clear positive signals have emerged.

Firstly, DGTX has found a new critical support level, according to the Fibonacci retracement indicator. The 61.8% Fibonacci retracement level, which was previously acting as stiff resistance between June 2019 and July 2020, absorbed the price pressure and means DGTX is now seeing a healthy rebound.

Digitex Fundamentals Are Stronger Than Ever 29

Bouncing off this critical support level can be considered a bullish sign. The 61.8% Fibonacci retracement level is regarded by some of the most prominent technical analysts as the ‘golden’ retracement area. Thus, the recent drop to this hurdle could result in a further upward advance and may lead to new yearly highs.

The second positive indicator is that smaller investors have continued to rush to buy DGTX over recent days. Santiment’s holder distribution chart reveals that the number of addresses holding between 0.01 to 10,000,000 DGTX has surged since last week, helping to distribute DGTX over a broad base of investors.

Digitex Fundamentals Are Stronger Than Ever 30

From here, things are looking bright for Digitex. During Friday’s event, Adam teased some of what we can expect from Digitex over the coming year, with a new white paper and roadmap due out over the next month or so. With so much optimism around what Digitex Futures Exchange has to offer, it seems to be a matter of time before DGTX breaks above the overhead resistance and climbs to new higher highs.

With Ali’s analysis in mind, there has never been a better time to get your hands on some DGTX. As Adam said last week, you won’t see these prices again once all our plans are unveiled. Spread the word, and be there when DGTX reaches a new ATH! 

Latest News

scalping

Level Up Your Scalping with These Candlestick Patterns

Trading
Uncategorized
• Ali Martinez
July 29, 2020

On Friday, July 31, Digitex Futures opened the doors with zero-commission cryptocurrency futures trading to the public for the very first time. Even two days before the official release, the DFE platform had reached an astounding 24-hour volume high of $2.9 billion in trading volume on Tuesday, July 28, 2020.

With this exciting new platform to trade on, there is no better time to understand how to use the platform and learn the basics of how to trade virtual asset derivative products. More importantly, having the ability to quickly recognize candlestick patterns can make trading strategies such as scalping highly profitable.

Candlestick Patterns to Level Up Your Scalping Strategy

As the virtual assets market sits on the cusp of its next bullish cycle, having a solid trading strategy is a must. Understanding when to buy and sell can make a huge difference in anyone’s portfolio.  Although trading is not necessarily easy, there are a number of easy-to-spot candlestick patterns that can help provide a framework about the trending direction of any given asset.

Some of the most popular pair of candlesticks patterns used by professional traders include, bullish and bearish engulfing, morning and evening star, and hammer and shooting star. By no means, the forecast presented by these technical formations is 100% accurate, but they have proven to provide significant opportunities to profit.

Level Up Your Scalping with These Candlestick Patterns 31

Bullish and Bearish Engulfing

Bullish and bearish engulfing patterns are the most widely known candlesticks patterns in trading. These technical formations forecast when upward and downward trends are about to reverse. Therefore, they indicate who is winning the raging battle between the bulls and the bears.

A bullish engulfing pattern develops when a red (purple) candlestick is succeeded by a green (blue) candlestick, which body overlaps the body of the previous candlestick. On the left side of the image below, it shows how the DGTX/USD trading pair is currently developing this type of candlestick pattern, indicating a potential breakout.

Traders with a lot of experience in the industry usually wait for the following candlestick to trade above the engulfing one to enter long positions.

Level Up Your Scalping with These Candlestick Patterns 32

On the other hand, a bearish engulfing pattern signals that prices are bound for a steep correction. The moment a red candlestick overlaps the body of a preceding green candle it suggests that the bears have overtaken the bulls. Thus, sellers will have a better chance to push prices in a downward direction.

As seen in the image above, DGTX went through a corrective period after this technical formation developed on April 10. The token saw its price take a 20% nosedive upon the completion of the bearish engulfing pattern before it bounced to up to new higher highs.

Morning and Evening Star

Morning and Evening star patterns consist of three candlesticks that describe whether the bull or the bears are taking control of the price action of any asset. These technical formations are also reversal patterns that anticipate oversold and overbought territories. When employed with other indexes, they have proven to be quite accurate.

On DGTX’s 1-day chart, a morning star pattern formed in mid-May following a downward trend. It consisted of three different candlesticks: a large red candlestick, a small-bodied candlestick or doji, and a green candlestick. This technical pattern was able to anticipate that DGTX was about to reverse, which was indeed followed by a 19% upswing.

Level Up Your Scalping with These Candlestick Patterns 33

An evening star, however, is used to detect when an uptrend is about to reverse. This bearish candlestick pattern also consists of three candles: a large green candlestick, a small-bodied candle or doji, and a red candle. As it happened in late May, the occurrence of this technical pattern led to a steep correction across most major digital assets, before prices recovered.

Inverted Hammer and Shooting Star

An inverted hammer and a shooting star pattern look very similar, but they present different scenarios. The former is a bullish candlestick pattern since it tends to occur in a downward trend. Meanwhile, the latter is used to predict that an uptrend is coming to an end.

In mid-December 2019, the DGTX/USD trading pair presented this type of candlestick pattern. It formed at the bottom of a downtrend and acted as a buy signal suggesting a high potential for a reversal to the upside. During that time, the inverted hammer was effectively able to predict an upswing of 19%.

Level Up Your Scalping with These Candlestick Patterns 34

A shooting star pattern formed in early May on DGTX’s daily chart. As seen in the image above, this candlestick pattern formed right on the top of an uptrend while the inverted hammer developed on the bottom of a downtrend. It was able to forecast that DGTX was bound for a correction.

Learning to master candlesticks could help you become a better trader, but remember, not everyone follows the same style. If you want to find out more about how to trade profitably on the DFE, watch our CEO Adam Todd giving you a quick demo. If you’re ready to start trading Bitcoin futures with zero fees, sign up here to get started right away.

July 29, 2020
Trading
Uncategorized

Level Up Your Scalping with These Candlestick Patterns

Ali Martinez
scalping

On Friday, July 31, Digitex Futures opened the doors with zero-commission cryptocurrency futures trading to the public for the very first time. Even two days before the official release, the DFE platform had reached an astounding 24-hour volume high of $2.9 billion in trading volume on Tuesday, July 28, 2020.

With this exciting new platform to trade on, there is no better time to understand how to use the platform and learn the basics of how to trade virtual asset derivative products. More importantly, having the ability to quickly recognize candlestick patterns can make trading strategies such as scalping highly profitable.

Candlestick Patterns to Level Up Your Scalping Strategy

As the virtual assets market sits on the cusp of its next bullish cycle, having a solid trading strategy is a must. Understanding when to buy and sell can make a huge difference in anyone’s portfolio.  Although trading is not necessarily easy, there are a number of easy-to-spot candlestick patterns that can help provide a framework about the trending direction of any given asset.

Some of the most popular pair of candlesticks patterns used by professional traders include, bullish and bearish engulfing, morning and evening star, and hammer and shooting star. By no means, the forecast presented by these technical formations is 100% accurate, but they have proven to provide significant opportunities to profit.

Level Up Your Scalping with These Candlestick Patterns 35

Bullish and Bearish Engulfing

Bullish and bearish engulfing patterns are the most widely known candlesticks patterns in trading. These technical formations forecast when upward and downward trends are about to reverse. Therefore, they indicate who is winning the raging battle between the bulls and the bears.

A bullish engulfing pattern develops when a red (purple) candlestick is succeeded by a green (blue) candlestick, which body overlaps the body of the previous candlestick. On the left side of the image below, it shows how the DGTX/USD trading pair is currently developing this type of candlestick pattern, indicating a potential breakout.

Traders with a lot of experience in the industry usually wait for the following candlestick to trade above the engulfing one to enter long positions.

Level Up Your Scalping with These Candlestick Patterns 36

On the other hand, a bearish engulfing pattern signals that prices are bound for a steep correction. The moment a red candlestick overlaps the body of a preceding green candle it suggests that the bears have overtaken the bulls. Thus, sellers will have a better chance to push prices in a downward direction.

As seen in the image above, DGTX went through a corrective period after this technical formation developed on April 10. The token saw its price take a 20% nosedive upon the completion of the bearish engulfing pattern before it bounced to up to new higher highs.

Morning and Evening Star

Morning and Evening star patterns consist of three candlesticks that describe whether the bull or the bears are taking control of the price action of any asset. These technical formations are also reversal patterns that anticipate oversold and overbought territories. When employed with other indexes, they have proven to be quite accurate.

On DGTX’s 1-day chart, a morning star pattern formed in mid-May following a downward trend. It consisted of three different candlesticks: a large red candlestick, a small-bodied candlestick or doji, and a green candlestick. This technical pattern was able to anticipate that DGTX was about to reverse, which was indeed followed by a 19% upswing.

Level Up Your Scalping with These Candlestick Patterns 37

An evening star, however, is used to detect when an uptrend is about to reverse. This bearish candlestick pattern also consists of three candles: a large green candlestick, a small-bodied candle or doji, and a red candle. As it happened in late May, the occurrence of this technical pattern led to a steep correction across most major digital assets, before prices recovered.

Inverted Hammer and Shooting Star

An inverted hammer and a shooting star pattern look very similar, but they present different scenarios. The former is a bullish candlestick pattern since it tends to occur in a downward trend. Meanwhile, the latter is used to predict that an uptrend is coming to an end.

In mid-December 2019, the DGTX/USD trading pair presented this type of candlestick pattern. It formed at the bottom of a downtrend and acted as a buy signal suggesting a high potential for a reversal to the upside. During that time, the inverted hammer was effectively able to predict an upswing of 19%.

Level Up Your Scalping with These Candlestick Patterns 38

A shooting star pattern formed in early May on DGTX’s daily chart. As seen in the image above, this candlestick pattern formed right on the top of an uptrend while the inverted hammer developed on the bottom of a downtrend. It was able to forecast that DGTX was bound for a correction.

Learning to master candlesticks could help you become a better trader, but remember, not everyone follows the same style. If you want to find out more about how to trade profitably on the DFE, watch our CEO Adam Todd giving you a quick demo. If you’re ready to start trading Bitcoin futures with zero fees, sign up here to get started right away.

Latest News

trading

Boost Your Trading Skills with These Crucial Chart Patterns

Trading
• Ali Martinez
July 14, 2020

Profitable trading involves spending some time learning the ropes. For this reason, Digitex’s business model was created around helping our users achieve their trading goals. Our team has been focused on producing educational material to allow users to take advantage of our zero-commission trading platform, creating more winning traders.

With the Digitex Futures Exchange enabling commission-free trading, there’s no better time to understand how to use the platform and learn the basics of how to trade crypto derivative products. More importantly, having the ability to quickly recognize chart patterns can make trading strategies such as scalping and swing trading highly profitable.

Crucial Chart Patterns to Boost Your Trading Skills

With the high levels of FUD (fear, uncertainty, and doubt) surrounding the cryptocurrency market, chart patterns provide a framework to filter all the nonsense. The analysis of such technical formations is crucial to determine who is winning the raging battle between bulls and bears.

As a rule of thumb, the trend of any given asset is usually interrupted by indecision periods. During these times, traders must identify whether or not a chart pattern is forming that could help forecast if the trend continues.

It is worth noting that chart patterns can take a long time to develop fully, which usually results in more significant price movements. Especially when the price action evolves around the previous trend.

These types of technical formations are known as continuation patterns, and the most common ones include triangles, channels, and pennants.

Boost Your Trading Skills with These Crucial Chart Patterns 39

Triangles

Triangles are one of the most common chart patterns employed in technical analysis due to the frequency in which they tend to develop. The price action of any given cryptocurrency can lead to the formation of ascending or descending triangles. The main difference between the two is that the former usually results in a breakout while the latter results in a breakdown.

By measuring the distance of the between the two highest points of a triangle, a potential target can be determined.

Bitcoin, for instance, generally forms this type of continuation pattern within all time frames. On the image below, one can see that on the left, a horizontal line was created along with the swing highs while a rising trendline developed along with the swing lows. This is considered an ascending triangle, which successfully predicted a potential target of nearly 10%.

Boost Your Trading Skills with These Crucial Chart Patterns 40

On the right side of the image above, however, Bitcoin developed a descending triangle. A horizontal trendline was created along with the swing lows while a descending trendline formed along with the swing highs. The distance between the highest points of the triangle anticipated a nearly 50% correction. When BTC finally broke down of this pattern in mid-November 2018, its price plummeted 47.5%.

Channels

Channels are composed of two parallel trendlines that can slope up or down. Typically, a parallel channel with a downward slope occurs in an uptrend, while a parallel channel with an upward bias shows up in a downtrend. There is a tendency to draw a parallel line equal to the channel’s distance to determine a potential target when an asset breaks out or down of this pattern.

These continuation patterns are commonly seen across the different time frames of DGTX. Recently, this utility token broke out of a descending parallel channel after trading within it for over three months. Moving past the upper boundary of the channel allowed DGTX to surge to $0.067, which is roughly the same target determined by this technical pattern.

Boost Your Trading Skills with These Crucial Chart Patterns 41

An ascending parallel channel was also spotted on DGTX’s 4-hour chart in late December 2018. Following the break of the lower boundary of this bearish formation, the price of this altcoin dropped by 20%. The downward impulse allowed it to reach the target calculated by drawing a parallel line equal to the ascending channel’s distance.

Pennants

Pennants are created by two trendlines that eventually converge. One of them goes in a downward direction while the other in an upward direction. As shown in the image below, the distance between the pennant’s highest points provides a potential target to take profits once prices eventually break out or down.

In an ascending trend, the creation of a pennant can lead to further gains. Ethereum’s price action, for instance, formed a pennant in March 2017 as the ICO mania was kicking off. Even though this pattern forecasted a 42% upswing, Ether was able to climb over 50% once it broke out of it.

Boost Your Trading Skills with These Crucial Chart Patterns 42

As ETH was reaching an exhaustion point a couple of months later, another pennant formed. This time, however, the outcome was bearish since the preceding trend was downward. As a result, the price of Ethereum plunged over 15%, which was consistent with the target given by this technical formation.

It’s Time to Practice

Now that you have learned about some of the most common continuation patterns in technical analysis, it’s time for you to practice. If you’re already trading on the DFE mainnet, then our zero-fee trading environment is perfect for testing out these chart patterns without the edge of commissions working against you.

If you’re still waiting for the chance to start trading bitcoin futures with zero fees, why not sign up today and get started!

July 14, 2020
Trading

Boost Your Trading Skills with These Crucial Chart Patterns

Ali Martinez
trading

Profitable trading involves spending some time learning the ropes. For this reason, Digitex’s business model was created around helping our users achieve their trading goals. Our team has been focused on producing educational material to allow users to take advantage of our zero-commission trading platform, creating more winning traders.

With the Digitex Futures Exchange enabling commission-free trading, there’s no better time to understand how to use the platform and learn the basics of how to trade crypto derivative products. More importantly, having the ability to quickly recognize chart patterns can make trading strategies such as scalping and swing trading highly profitable.

Crucial Chart Patterns to Boost Your Trading Skills

With the high levels of FUD (fear, uncertainty, and doubt) surrounding the cryptocurrency market, chart patterns provide a framework to filter all the nonsense. The analysis of such technical formations is crucial to determine who is winning the raging battle between bulls and bears.

As a rule of thumb, the trend of any given asset is usually interrupted by indecision periods. During these times, traders must identify whether or not a chart pattern is forming that could help forecast if the trend continues.

It is worth noting that chart patterns can take a long time to develop fully, which usually results in more significant price movements. Especially when the price action evolves around the previous trend.

These types of technical formations are known as continuation patterns, and the most common ones include triangles, channels, and pennants.

Boost Your Trading Skills with These Crucial Chart Patterns 43

Triangles

Triangles are one of the most common chart patterns employed in technical analysis due to the frequency in which they tend to develop. The price action of any given cryptocurrency can lead to the formation of ascending or descending triangles. The main difference between the two is that the former usually results in a breakout while the latter results in a breakdown.

By measuring the distance of the between the two highest points of a triangle, a potential target can be determined.

Bitcoin, for instance, generally forms this type of continuation pattern within all time frames. On the image below, one can see that on the left, a horizontal line was created along with the swing highs while a rising trendline developed along with the swing lows. This is considered an ascending triangle, which successfully predicted a potential target of nearly 10%.

Boost Your Trading Skills with These Crucial Chart Patterns 44

On the right side of the image above, however, Bitcoin developed a descending triangle. A horizontal trendline was created along with the swing lows while a descending trendline formed along with the swing highs. The distance between the highest points of the triangle anticipated a nearly 50% correction. When BTC finally broke down of this pattern in mid-November 2018, its price plummeted 47.5%.

Channels

Channels are composed of two parallel trendlines that can slope up or down. Typically, a parallel channel with a downward slope occurs in an uptrend, while a parallel channel with an upward bias shows up in a downtrend. There is a tendency to draw a parallel line equal to the channel’s distance to determine a potential target when an asset breaks out or down of this pattern.

These continuation patterns are commonly seen across the different time frames of DGTX. Recently, this utility token broke out of a descending parallel channel after trading within it for over three months. Moving past the upper boundary of the channel allowed DGTX to surge to $0.067, which is roughly the same target determined by this technical pattern.

Boost Your Trading Skills with These Crucial Chart Patterns 45

An ascending parallel channel was also spotted on DGTX’s 4-hour chart in late December 2018. Following the break of the lower boundary of this bearish formation, the price of this altcoin dropped by 20%. The downward impulse allowed it to reach the target calculated by drawing a parallel line equal to the ascending channel’s distance.

Pennants

Pennants are created by two trendlines that eventually converge. One of them goes in a downward direction while the other in an upward direction. As shown in the image below, the distance between the pennant’s highest points provides a potential target to take profits once prices eventually break out or down.

In an ascending trend, the creation of a pennant can lead to further gains. Ethereum’s price action, for instance, formed a pennant in March 2017 as the ICO mania was kicking off. Even though this pattern forecasted a 42% upswing, Ether was able to climb over 50% once it broke out of it.

Boost Your Trading Skills with These Crucial Chart Patterns 46

As ETH was reaching an exhaustion point a couple of months later, another pennant formed. This time, however, the outcome was bearish since the preceding trend was downward. As a result, the price of Ethereum plunged over 15%, which was consistent with the target given by this technical formation.

It’s Time to Practice

Now that you have learned about some of the most common continuation patterns in technical analysis, it’s time for you to practice. If you’re already trading on the DFE mainnet, then our zero-fee trading environment is perfect for testing out these chart patterns without the edge of commissions working against you.

If you’re still waiting for the chance to start trading bitcoin futures with zero fees, why not sign up today and get started!

Latest News

bitcoin

A Technical Index To Help You Time Bitcoin’s Price Action

Trading
• Ali Martinez
June 23, 2020

Thousands of technical indicators are used by traders all over the world to try to forecast the direction of Bitcoin’s trend and profit from it. While most of these indexes are easily accessible to the public, there is one, in particular, that is widely used by institutional investors. Here, we demonstrate how retail traders can use it to their advantage. 

The Tom Demark (TD) Sequential indicator is often described as one of the most efficient gauges since it can be easily adapted to any trading strategy. This index serves the purpose of identifying local tops and bottoms as it signals when an uptrend or a downtrend is about to reach an exhaustion point and reverse.     

Over the years, the TD setup has proven to be essential in determining Bitcoin’s price action. In 2020, for instance, it was able to predict one of the most significant corrections that the flagship cryptocurrency has seen thus far. 

In mid-February when Bitcoin surged to a yearly high of $10,500, the TD Sequential presented a sell signal in the form of a green nine candlestick. Following the bearish formation, BTC went through a massive bearish impulse that saw its price plummet by nearly 63%.

Then, it was also able to accurately estimate that BTC was reaching an oversold territory on March 16. After providing a buy signal in the form of a red nine candlestick that transitioned into a green one, the price of Bitcoin recovered over 56% of the losses incurred.  

Bitcoin US dollar price chart
TD Sequential Times BTC’s Price Action During March’s Market Meltdown. (Source: TradingView)

The high level of precision that this technical index has to determine where Bitcoin is headed next, makes it ideal for any trader to consider it before entering any long or short positions. For this reason, we will explore some of the most simple and effective rules of the TD Sequential to help you time the price action of the bellwether cryptocurrency.  

When to Buy and When to Sell?

The TD setup usually presents different buy and sell signals that are correlated with Bitcoin’s price action. These vary between aggressive, combo, and sequential 13 candlesticks as well as others. But for now, we will direct our focus towards the most significant bullish and bearish formation that will boost your trading strategy. 

The most important buy and sell signals start with the completion of a nine candlesticks count. When a nine candlesticks countdown is completed, it is at that point that the TD Sequential indicates that a pullback or trend reversal is about to take place. This can happen in an upward or downward direction. 

When it occurs to the upside, the bearish formation develops in the form of a green nine candlestick that forecasts a one to four candlesticks correction or the beginning of a new downward countdown. Conversely, when the nine candlesticks count happens in a downward trend, the buy signal develops in the form of a red nine candlestick estimating that a bullish impulse is underway. 

It is worth noting that green nine and red nine candlesticks can transition into red or green one candlesticks, respectively, depending on Bitcoin’s price action. But this does not invalidate the forecast of each signal. 

A look at BTC’s 1-day chart shows how the formation of green and red nine candlesticks has provided several opportunities to profit since mid-December. Traders who rigorously followed these signals since then would have made at least 180% in profits. Meanwhile, those who bought Bitcoin around December 16, 2019, would have 47% returns.  

Bitcoin US dollar price chart
TD Setup Provides Sizable Opportunites to Profit. (Source: TradingView)

Another important rule to have in mind when using the TD Sequential indicator is that a green two candlestick trading above a preceding green one candle can have the potential to invalidate a sell signal. The same goes when a red nine candlestick develops and there is a red two candlestick trading below the preceding red one candle. 

If you’re already trading on the DFE mainnet, then our zero-fee trading environment is perfect for testing out these kinds of indicators in your trading strategy without the edge of commissions working against you.

If you’re still waiting for the chance to get onto the DFE mainnet, then why not test out the TD Sequential indicator on the Digitex testnet platform? It’s free to sign up and doing so means you’re automatically queued for a mainnet account. We’re onboarding more and more traders every week, turning the DFE into one of the most liquid exchanges on the market.

June 23, 2020
Trading

A Technical Index To Help You Time Bitcoin’s Price Action

Ali Martinez
bitcoin

Thousands of technical indicators are used by traders all over the world to try to forecast the direction of Bitcoin’s trend and profit from it. While most of these indexes are easily accessible to the public, there is one, in particular, that is widely used by institutional investors. Here, we demonstrate how retail traders can use it to their advantage. 

The Tom Demark (TD) Sequential indicator is often described as one of the most efficient gauges since it can be easily adapted to any trading strategy. This index serves the purpose of identifying local tops and bottoms as it signals when an uptrend or a downtrend is about to reach an exhaustion point and reverse.     

Over the years, the TD setup has proven to be essential in determining Bitcoin’s price action. In 2020, for instance, it was able to predict one of the most significant corrections that the flagship cryptocurrency has seen thus far. 

In mid-February when Bitcoin surged to a yearly high of $10,500, the TD Sequential presented a sell signal in the form of a green nine candlestick. Following the bearish formation, BTC went through a massive bearish impulse that saw its price plummet by nearly 63%.

Then, it was also able to accurately estimate that BTC was reaching an oversold territory on March 16. After providing a buy signal in the form of a red nine candlestick that transitioned into a green one, the price of Bitcoin recovered over 56% of the losses incurred.  

Bitcoin US dollar price chart
TD Sequential Times BTC’s Price Action During March’s Market Meltdown. (Source: TradingView)

The high level of precision that this technical index has to determine where Bitcoin is headed next, makes it ideal for any trader to consider it before entering any long or short positions. For this reason, we will explore some of the most simple and effective rules of the TD Sequential to help you time the price action of the bellwether cryptocurrency.  

When to Buy and When to Sell?

The TD setup usually presents different buy and sell signals that are correlated with Bitcoin’s price action. These vary between aggressive, combo, and sequential 13 candlesticks as well as others. But for now, we will direct our focus towards the most significant bullish and bearish formation that will boost your trading strategy. 

The most important buy and sell signals start with the completion of a nine candlesticks count. When a nine candlesticks countdown is completed, it is at that point that the TD Sequential indicates that a pullback or trend reversal is about to take place. This can happen in an upward or downward direction. 

When it occurs to the upside, the bearish formation develops in the form of a green nine candlestick that forecasts a one to four candlesticks correction or the beginning of a new downward countdown. Conversely, when the nine candlesticks count happens in a downward trend, the buy signal develops in the form of a red nine candlestick estimating that a bullish impulse is underway. 

It is worth noting that green nine and red nine candlesticks can transition into red or green one candlesticks, respectively, depending on Bitcoin’s price action. But this does not invalidate the forecast of each signal. 

A look at BTC’s 1-day chart shows how the formation of green and red nine candlesticks has provided several opportunities to profit since mid-December. Traders who rigorously followed these signals since then would have made at least 180% in profits. Meanwhile, those who bought Bitcoin around December 16, 2019, would have 47% returns.  

Bitcoin US dollar price chart
TD Setup Provides Sizable Opportunites to Profit. (Source: TradingView)

Another important rule to have in mind when using the TD Sequential indicator is that a green two candlestick trading above a preceding green one candle can have the potential to invalidate a sell signal. The same goes when a red nine candlestick develops and there is a red two candlestick trading below the preceding red one candle. 

If you’re already trading on the DFE mainnet, then our zero-fee trading environment is perfect for testing out these kinds of indicators in your trading strategy without the edge of commissions working against you.

If you’re still waiting for the chance to get onto the DFE mainnet, then why not test out the TD Sequential indicator on the Digitex testnet platform? It’s free to sign up and doing so means you’re automatically queued for a mainnet account. We’re onboarding more and more traders every week, turning the DFE into one of the most liquid exchanges on the market.

Latest News

Ethereum Paves the Way For Mainstream Adoption as It Signals Further Gains 47

Ethereum Paves the Way For Mainstream Adoption as It Signals Further Gains

Trading
• Ali Martinez
June 16, 2020

Digitex Futures Exchange is gearing up to roll out a new financial product this summer that will enable mainnet users to benefit from Ethereum’s price action. The new ETHUSD perpetual contracts together with the opportunity for zero-fee trading will offer a broader range of markets to our traders, attracting more users to our mainnet and driving demand for the DGTX token. 

For this reason, we have decided to take a look at the different milestones that Ethereum has reached over the past year to determine whether or not it will offer sizable opportunities for those trading it.

Ethereum’s Utility Increases Over Time

The second-largest cryptocurrency in the industry by market cap, Ethereum, has managed to expand its reach to millions of investors worldwide over the past year. Not only Japan’s e-commerce giant Ratuken launched a new mobile app that offers a spot trading service for ETH, but Swiss exchange SIX listed a joint Bitcoin and Ether exchange-traded product (ETP).

The move was meant to provide a “unique way for investors to add the two major cryptocurrencies globally to their portfolio,” according to Amun CEO Hany Rashwan.

As more retail and institutional investors gained access to Ethereum, different organizations across the globe have employed the smart contracts giant’s technology to improve their operations. IKEA, for instance, took part in a commercial transaction on the Ethereum network to facilitate the settlement of an order from a local retailer. Uniswap, on the other hand, listed the first real estate security token and UNICEF, the United Nations’ charity arm for children, launched a cryptocurrency fund based on Ether donations.

Meanwhile, professional soccer clubs Galatasaray Spor Kulübü and Juventus, as well as NBA’s Sacramento Kings and the Ultimate Fighting Championship (UFC), developed Ethereum-based digital assets as a new way to keep their fans engaged.

Now, the Ethereum Foundation prepares to transition from a proof-of-work (PoW) consensus algorithm to proof-of-stake (PoS) and its utility may expand further. The upgrade is expected to solve the scalability issues that the network has faced throughout the years and transform the crypto-economic incentives by rewarding ETH holders.

The launch of ETH 2.0 is scheduled for Q3 2020, but as speculation mounts around the upcoming hard fork, demand for this altcoin is assumed to rise.

“It’s hard to be bearish with Ethereum staking coming soon. I suspect there will be a lot more ether staked than the projected 10-30 million. Perhaps even 50 million-plus if a lot of people select to stake through exchanges/rocket pool,” said David Schwartz, a senior software engineer at decentralized exchange Nash.

While market participants grow overwhelmingly bullish about what the future holds for Ether, different charting patterns validate this momentum.

Prices Continue Trending Up

Despite the downward pressure on Ethereum since the beginning of the month, its price continues trending up from a long-term perspective. Based on the 1-day chart, the smart contract giant is contained within an ascending parallel channel that began to take shape during the March market meltdown.

Consistent with the characteristics of this technical pattern, each time Ether rises to the upper boundary of the channel, it retraces down to hit the lower boundary. From this point, it bounces back up again.

The recent bearish impulse that Ether went through allowed it to reach the bottom of the channel. If this support barrier continues to hold, ETH could surge to the middle or upper boundary of the channel like it has done it over the past three months.

Failing to do so, however, could jeopardize the bullish outlook and set off the alerts for a steep decline.

Ethereum US dollar price chart
Ethereum Is Contained Within a Parallel Channel. (Source: TradingView)

IntoTheBlock’s “In/Out of the Money Around Price” (IOMAP) model suggests that bouncing off the lower boundary of the ascending parallel channel will not be easy this time around.

Based on this on-chain metric, roughly 1.24 million addresses bought over 7.42 million ETH between $235 and $242. These price levels represent a massive hurdle that may have the ability to absorb any upside pressure. But breaking through it will increase the odds for an upswing towards $280 since there isn’t any significant resistance in-between.

On the flip side, the IOMAP cohorts reveal that if the current support level fails to hold, the most next significant barrier to watch out for sits around $204. Here, nearly 1.7 million addresses purchased more than 6 million ETH.

Ethereum Faces Strong Resistance Ahead. (Source: IntoTheBlock)
Ethereum Faces Strong Resistance Ahead. (Source: IntoTheBlock)

Due to the ambiguous outlook, the Fibonacci retracement indicator indicates that the area between the 61.8% and 78.6% Fib is a reasonable no-trade zone. This support and resistance points sit at $211 and $245, respectively.

A daily candlestick close above this area may see an increase in demand that sends Ether to the upper boundary of the aforementioned parallel channel.

Ethereum US dollar price chart
Ethereum Sits In a No-Trade Zone. (Source: TradingView)

Conversely, a sudden rise in the sell orders behind this cryptocurrency that allows it to drop below this no-trade zone might ignite a sell-off. Under such circumstances, investors should expect Ether to plunge towards the 50% or 38.2% Fib levels that lie around $188 and $165, respectively.

With the cryptocurrency market on the cusp of its next bullish cycle, it is crucial to understand the significance of the support and resistance levels previously mentioned. Although there is more room to go up, a steep correction can be extremely beneficial in the long-term. It could help flush out some of the so-called “weak hands” and allow sidelined investors to get back in the market.

A new inflow of capital into Ethereum may eventually propel its price to new-yearly highs.

June 16, 2020
Trading

Ethereum Paves the Way For Mainstream Adoption as It Signals Further Gains

Ali Martinez
Ethereum Paves the Way For Mainstream Adoption as It Signals Further Gains 48

Digitex Futures Exchange is gearing up to roll out a new financial product this summer that will enable mainnet users to benefit from Ethereum’s price action. The new ETHUSD perpetual contracts together with the opportunity for zero-fee trading will offer a broader range of markets to our traders, attracting more users to our mainnet and driving demand for the DGTX token. 

For this reason, we have decided to take a look at the different milestones that Ethereum has reached over the past year to determine whether or not it will offer sizable opportunities for those trading it.

Ethereum’s Utility Increases Over Time

The second-largest cryptocurrency in the industry by market cap, Ethereum, has managed to expand its reach to millions of investors worldwide over the past year. Not only Japan’s e-commerce giant Ratuken launched a new mobile app that offers a spot trading service for ETH, but Swiss exchange SIX listed a joint Bitcoin and Ether exchange-traded product (ETP).

The move was meant to provide a “unique way for investors to add the two major cryptocurrencies globally to their portfolio,” according to Amun CEO Hany Rashwan.

As more retail and institutional investors gained access to Ethereum, different organizations across the globe have employed the smart contracts giant’s technology to improve their operations. IKEA, for instance, took part in a commercial transaction on the Ethereum network to facilitate the settlement of an order from a local retailer. Uniswap, on the other hand, listed the first real estate security token and UNICEF, the United Nations’ charity arm for children, launched a cryptocurrency fund based on Ether donations.

Meanwhile, professional soccer clubs Galatasaray Spor Kulübü and Juventus, as well as NBA’s Sacramento Kings and the Ultimate Fighting Championship (UFC), developed Ethereum-based digital assets as a new way to keep their fans engaged.

Now, the Ethereum Foundation prepares to transition from a proof-of-work (PoW) consensus algorithm to proof-of-stake (PoS) and its utility may expand further. The upgrade is expected to solve the scalability issues that the network has faced throughout the years and transform the crypto-economic incentives by rewarding ETH holders.

The launch of ETH 2.0 is scheduled for Q3 2020, but as speculation mounts around the upcoming hard fork, demand for this altcoin is assumed to rise.

“It’s hard to be bearish with Ethereum staking coming soon. I suspect there will be a lot more ether staked than the projected 10-30 million. Perhaps even 50 million-plus if a lot of people select to stake through exchanges/rocket pool,” said David Schwartz, a senior software engineer at decentralized exchange Nash.

While market participants grow overwhelmingly bullish about what the future holds for Ether, different charting patterns validate this momentum.

Prices Continue Trending Up

Despite the downward pressure on Ethereum since the beginning of the month, its price continues trending up from a long-term perspective. Based on the 1-day chart, the smart contract giant is contained within an ascending parallel channel that began to take shape during the March market meltdown.

Consistent with the characteristics of this technical pattern, each time Ether rises to the upper boundary of the channel, it retraces down to hit the lower boundary. From this point, it bounces back up again.

The recent bearish impulse that Ether went through allowed it to reach the bottom of the channel. If this support barrier continues to hold, ETH could surge to the middle or upper boundary of the channel like it has done it over the past three months.

Failing to do so, however, could jeopardize the bullish outlook and set off the alerts for a steep decline.

Ethereum US dollar price chart
Ethereum Is Contained Within a Parallel Channel. (Source: TradingView)

IntoTheBlock’s “In/Out of the Money Around Price” (IOMAP) model suggests that bouncing off the lower boundary of the ascending parallel channel will not be easy this time around.

Based on this on-chain metric, roughly 1.24 million addresses bought over 7.42 million ETH between $235 and $242. These price levels represent a massive hurdle that may have the ability to absorb any upside pressure. But breaking through it will increase the odds for an upswing towards $280 since there isn’t any significant resistance in-between.

On the flip side, the IOMAP cohorts reveal that if the current support level fails to hold, the most next significant barrier to watch out for sits around $204. Here, nearly 1.7 million addresses purchased more than 6 million ETH.

Ethereum Faces Strong Resistance Ahead. (Source: IntoTheBlock)
Ethereum Faces Strong Resistance Ahead. (Source: IntoTheBlock)

Due to the ambiguous outlook, the Fibonacci retracement indicator indicates that the area between the 61.8% and 78.6% Fib is a reasonable no-trade zone. This support and resistance points sit at $211 and $245, respectively.

A daily candlestick close above this area may see an increase in demand that sends Ether to the upper boundary of the aforementioned parallel channel.

Ethereum US dollar price chart
Ethereum Sits In a No-Trade Zone. (Source: TradingView)

Conversely, a sudden rise in the sell orders behind this cryptocurrency that allows it to drop below this no-trade zone might ignite a sell-off. Under such circumstances, investors should expect Ether to plunge towards the 50% or 38.2% Fib levels that lie around $188 and $165, respectively.

With the cryptocurrency market on the cusp of its next bullish cycle, it is crucial to understand the significance of the support and resistance levels previously mentioned. Although there is more room to go up, a steep correction can be extremely beneficial in the long-term. It could help flush out some of the so-called “weak hands” and allow sidelined investors to get back in the market.

A new inflow of capital into Ethereum may eventually propel its price to new-yearly highs.

Latest News

Bitcoin Breaks $10,000; Will DGTX Follow? 49

Bitcoin Breaks $10,000; Will DGTX Follow?

Trading
• Ali Martinez
June 2, 2020

After a relatively quiet month in the cryptocurrency markets, volatility has returned, and Bitcoin has done nothing but shoot up. Data reveals that BTC could be poised for a further upward advance. Meanwhile, DGTX is consolidating within a narrow trading range as it prepares for a major price movement. 

Bitcoin Breaks Out, Aiming For New Yearly Highs

Bitcoin stole the spotlight of the cryptocurrency market after the price action it has experienced over the past 48 hours. The flagship cryptocurrency went through a bullish impulse that saw its price rise by 10%.

The sudden upswing allowed BTC to move past the $10,000 resistance level. It also helped break a multi-year trendline that has prevented it from reaching its upside potential since the December 2017 all-time high of nearly $20,000.

Since then, this resistance barrier has been able to reject Bitcoin at each major peak. These include the late June 2019 high of $14,000, the mid-July 2019 peak of $13,200, the early August 2019 spike of $12,300, and the mid-February 2020 high of $10,500.

Now that the pioneer cryptocurrency sliced through the resistance trendline for the first time in two years, it could be poised to enter a new full-blown bull market.

Bitcoin Breaks Above Multi-Year Trendline. (Source: TradingView)
Bitcoin Breaks Above Multi-Year Trendline. (Source: TradingView)

From a short term perspective, such as its 1-day chart, Bitcoin appears to have more gas in the tank. Within this timeframe, its price action has been contained within an ascending parallel channel that developed during March’s Black Thursday.

Since then, each time BTC surges to the upper boundary of the channel, it pulls back to hit the lower limit, and from this point, it bounces back up again. This is consistent with the characteristics of a channel.

If the price history of the past three months repeats, the bellwether cryptocurrency could advance further up towards the middle or upper boundary of the ascending parallel channel.

Bitcoin Remains Contained in an Ascending Parallel Channel. (Source: TradingView)
Bitcoin Remains Contained in an Ascending Parallel Channel. (Source: TradingView)

The Fibonacci retracement indicator adds credence to this bullish scenario. This technical index estimates that if Bitcoin is able to turn the $10,500 resistance wall into support, there isn’t any major barrier to prevent it from rising towards the 127.2% Fibonacci retracement level at $12,250.

Bitcoin Faces Strong Support and Resistance. (Source: TradingView)
Bitcoin Faces Strong Support and Resistance. (Source: TradingView)

It is worth mentioning that high levels of volatility in the market seen over the past few days sent investors into “greed,” according to the Crypto Fear and Greed Index. But greed is not necessarily a good sign as one of the most successful investors in the world Warren Buffett once said:

“Be fearful when others are greedy and greedy when others are fearful.”

For this reason, market participants must pay close attention to the 78.6% Fibonacci retracement level that sits at $9,100. A sudden bearish impulse that sends Bitcoin below this critical support level could jeopardize the bullish outlook.

Under such circumstances, the next supply barriers to watch out for are the 61.8% and 50% Fibonacci retracement levels. These support zones sit at $8,000 and $7,250, respectively.

DGTX May Soon Follow Bitcoin’s Lead

While Bitcoin is letting loose, the DGTX/BTC trading pair continues consolidating within a narrow trading range. The price action of this altcoin has been contained between the 4,300 satoshis support level and the 4,880 satoshis resistance since mid-May.

Throughout this stagnation phase, the Bollinger bands were forced to squeeze on DGTX’s 12-hour chart due to the low levels of volatility. Squeezes are typically succeeded by wild price movements. The longer the squeeze, the higher the probability of a strong breakout.

Since this technical indicator does not provide a clear path of where DGTX could be headed next, the area between the aforementioned support and resistance levels is a reasonable no-trade zone.

A decisive 12-hour candlestick close above or below this area will determine the direction of the trend.

DGTX Sits in a No-Trade Zone. (Source: TradingView)
DGTX Sits in a No-Trade Zone. (Source: TradingView)

In the meantime, it seems like the DGTX/BTC trading pair is about to bounce off support. The Tom Demark (TD) Sequential indicator is presenting a buy signal in the form of a red nine candlestick within the same timeframe.

The bullish formation suggests that DGTX could surge for one to four candlesticks. But if the buying pressure is strong enough, it could trigger a new upward countdown.

TD Sequential Presents a Buy Signal for DGTX. (Source: TradingView)
TD Sequential Presents a Buy Signal for DGTX. (Source: TradingView)

Regardless of the outlook presented by the TD setup, the area between 4,300 satoshis and 4,880 satoshis remains a no-trade zone. Therefore, one must wait for a break of support or resistance before entering any trade to avoid getting caught on the wrong side of the trend.

Upon the break of the resistance level, for instance, the next major barrier is the 38.2% Fibonacci retracement level that sits at 5,700 satoshis. Conversely, if the selling pressure increases and DGTX breaks below support, it could target the 78.6% Fibonacci retracement level at 3,800 satoshis.

Key Support and Resistance Levels to Watch Out. (Source: TradingView)
Key Support and Resistance Levels to Watch Out. (Source: TradingView)

Understanding the importance of the support and resistance levels mentioned above for both Bitcoin and DGTX could allow anyone to minimize risk while profiting from the next significant price movement of any of these cryptocurrencies.

June 2, 2020
Trading

Bitcoin Breaks $10,000; Will DGTX Follow?

Ali Martinez
Bitcoin Breaks $10,000; Will DGTX Follow? 50

After a relatively quiet month in the cryptocurrency markets, volatility has returned, and Bitcoin has done nothing but shoot up. Data reveals that BTC could be poised for a further upward advance. Meanwhile, DGTX is consolidating within a narrow trading range as it prepares for a major price movement. 

Bitcoin Breaks Out, Aiming For New Yearly Highs

Bitcoin stole the spotlight of the cryptocurrency market after the price action it has experienced over the past 48 hours. The flagship cryptocurrency went through a bullish impulse that saw its price rise by 10%.

The sudden upswing allowed BTC to move past the $10,000 resistance level. It also helped break a multi-year trendline that has prevented it from reaching its upside potential since the December 2017 all-time high of nearly $20,000.

Since then, this resistance barrier has been able to reject Bitcoin at each major peak. These include the late June 2019 high of $14,000, the mid-July 2019 peak of $13,200, the early August 2019 spike of $12,300, and the mid-February 2020 high of $10,500.

Now that the pioneer cryptocurrency sliced through the resistance trendline for the first time in two years, it could be poised to enter a new full-blown bull market.

Bitcoin Breaks Above Multi-Year Trendline. (Source: TradingView)
Bitcoin Breaks Above Multi-Year Trendline. (Source: TradingView)

From a short term perspective, such as its 1-day chart, Bitcoin appears to have more gas in the tank. Within this timeframe, its price action has been contained within an ascending parallel channel that developed during March’s Black Thursday.

Since then, each time BTC surges to the upper boundary of the channel, it pulls back to hit the lower limit, and from this point, it bounces back up again. This is consistent with the characteristics of a channel.

If the price history of the past three months repeats, the bellwether cryptocurrency could advance further up towards the middle or upper boundary of the ascending parallel channel.

Bitcoin Remains Contained in an Ascending Parallel Channel. (Source: TradingView)
Bitcoin Remains Contained in an Ascending Parallel Channel. (Source: TradingView)

The Fibonacci retracement indicator adds credence to this bullish scenario. This technical index estimates that if Bitcoin is able to turn the $10,500 resistance wall into support, there isn’t any major barrier to prevent it from rising towards the 127.2% Fibonacci retracement level at $12,250.

Bitcoin Faces Strong Support and Resistance. (Source: TradingView)
Bitcoin Faces Strong Support and Resistance. (Source: TradingView)

It is worth mentioning that high levels of volatility in the market seen over the past few days sent investors into “greed,” according to the Crypto Fear and Greed Index. But greed is not necessarily a good sign as one of the most successful investors in the world Warren Buffett once said:

“Be fearful when others are greedy and greedy when others are fearful.”

For this reason, market participants must pay close attention to the 78.6% Fibonacci retracement level that sits at $9,100. A sudden bearish impulse that sends Bitcoin below this critical support level could jeopardize the bullish outlook.

Under such circumstances, the next supply barriers to watch out for are the 61.8% and 50% Fibonacci retracement levels. These support zones sit at $8,000 and $7,250, respectively.

DGTX May Soon Follow Bitcoin’s Lead

While Bitcoin is letting loose, the DGTX/BTC trading pair continues consolidating within a narrow trading range. The price action of this altcoin has been contained between the 4,300 satoshis support level and the 4,880 satoshis resistance since mid-May.

Throughout this stagnation phase, the Bollinger bands were forced to squeeze on DGTX’s 12-hour chart due to the low levels of volatility. Squeezes are typically succeeded by wild price movements. The longer the squeeze, the higher the probability of a strong breakout.

Since this technical indicator does not provide a clear path of where DGTX could be headed next, the area between the aforementioned support and resistance levels is a reasonable no-trade zone.

A decisive 12-hour candlestick close above or below this area will determine the direction of the trend.

DGTX Sits in a No-Trade Zone. (Source: TradingView)
DGTX Sits in a No-Trade Zone. (Source: TradingView)

In the meantime, it seems like the DGTX/BTC trading pair is about to bounce off support. The Tom Demark (TD) Sequential indicator is presenting a buy signal in the form of a red nine candlestick within the same timeframe.

The bullish formation suggests that DGTX could surge for one to four candlesticks. But if the buying pressure is strong enough, it could trigger a new upward countdown.

TD Sequential Presents a Buy Signal for DGTX. (Source: TradingView)
TD Sequential Presents a Buy Signal for DGTX. (Source: TradingView)

Regardless of the outlook presented by the TD setup, the area between 4,300 satoshis and 4,880 satoshis remains a no-trade zone. Therefore, one must wait for a break of support or resistance before entering any trade to avoid getting caught on the wrong side of the trend.

Upon the break of the resistance level, for instance, the next major barrier is the 38.2% Fibonacci retracement level that sits at 5,700 satoshis. Conversely, if the selling pressure increases and DGTX breaks below support, it could target the 78.6% Fibonacci retracement level at 3,800 satoshis.

Key Support and Resistance Levels to Watch Out. (Source: TradingView)
Key Support and Resistance Levels to Watch Out. (Source: TradingView)

Understanding the importance of the support and resistance levels mentioned above for both Bitcoin and DGTX could allow anyone to minimize risk while profiting from the next significant price movement of any of these cryptocurrencies.

Latest News

bitcoin

3 Technical Indicators to Help Time Bitcoin’s Price Action

Trading
• Ali Martinez
May 19, 2020

With the upcoming launch of the Digitex Futures Exchange, our team has been focused on creating educational material to allow traders and market participants alike to benefit the most from zero-commission trading.

In our beginners’ guide, for instance, we explain the basics of how to trade crypto derivative products and give you a breakdown of the platform.

Now, we want to help you understand how different technical indexes within Digitex Futures can help you time your next trade.

3 Technical Indicators to Supercharge Your Bitcoin Trading

One of the most widely used technical indicators among traders is the Bollinger bands. This analysis tool is defined by a set of two standard deviation lines and a simple moving average. Its popularity relies on the ability to identify that momentum is building up for a period of high volatility.

When the price action of a given asset goes through a stagnation phase, the Bollinger bands tend to squeeze. Squeezes are indicative of periods of low volatility and are typically succeeded by wild price movements. The longer the squeeze, the higher the probability of a strong breakout.

A look at BTC’s 5-min chart reveals that the Bollinger bands are squeezing. Since this technical index does not provide a clear path of where BTC could be headed next, the area between the lower and upper band is a reasonable no-trade zone.

A decisive move above or below this area will determine the direction of the trend.

Bitcoin USD price chart
Bollinger Bands Squeeze Signaling High Volatility. (Source: TradingView)

Nonetheless, when taking into consideration the parabolic stop and reverse, or “SAR,” we can estimate that the direction of Bitcoin is currently bullish despite the low levels of volatility.

Every time the stop and reversal points move below the price of an asset, it is considered to be a positive sign. On the flip side, when the SAR points move above the price of a given asset, it can be viewed as a bearish signal.

By taking in aggregate the Bollinger bands and the stop and reversal system, we can assume that there is a higher probability that Bitcoin will go up when volatility strikes back.

But how high can it go?

Bitcoin USD price chart
Stop and Reversal Points Turn Bullish. (Source: TradingView)

To answer this question, we can use the Fibonacci retracement indicator. This metric is based on a sequence of numbers expressed by ratios between the numbers in the series, according to Investopedia.

By plotting two extreme points, which are the most recent swing low at $9,475 and the peak of $9,820, the Fibonacci retracement indicator provides critical ratios that can be considered areas of support and resistance.

A bullish impulse that allows Bitcoin to move above the overhead resistance could see it rise towards the 127.2%, 141.4%, and, most importantly, the 161.8% Fibonacci retracement level. These resistance barriers sit approximately at $9,900, $9,960, and $10,030, respectively.

Bitcoin USD price chart
The Fibonacci Retracement Indicator Suggests the Next Major Resistance Sits at $10,030. (Source: TradingView)

At press time, we can see that the stop and reversal points accurately predicted that Bitcoin’s trend was bullish despite the consolidation phase. As the bellwether cryptocurrency broke above the resistance represented by the upper Bolliger band, it seems to be marching towards the 127.2%, 141.4%, or 161.8% Fibonacci retracement levels.

Bitcoin USD price chart
The 3 Indexes In Question Seem to Work Effectively. (Source: TradingView)

Individually, these different technical indicators may seem to provide an ambiguous outlook about future Bitcoin prices. Taken in aggregate, however, they can provide actionable information about when to enter and exit trades on the Digitex Futures Exchange.

With a good dose of patience and high levels of concentration on the charts, it is possible to minimize risk while profiting from Bitcoin’s price action.

May 19, 2020
Trading

3 Technical Indicators to Help Time Bitcoin’s Price Action

Ali Martinez
bitcoin

With the upcoming launch of the Digitex Futures Exchange, our team has been focused on creating educational material to allow traders and market participants alike to benefit the most from zero-commission trading.

In our beginners’ guide, for instance, we explain the basics of how to trade crypto derivative products and give you a breakdown of the platform.

Now, we want to help you understand how different technical indexes within Digitex Futures can help you time your next trade.

3 Technical Indicators to Supercharge Your Bitcoin Trading

One of the most widely used technical indicators among traders is the Bollinger bands. This analysis tool is defined by a set of two standard deviation lines and a simple moving average. Its popularity relies on the ability to identify that momentum is building up for a period of high volatility.

When the price action of a given asset goes through a stagnation phase, the Bollinger bands tend to squeeze. Squeezes are indicative of periods of low volatility and are typically succeeded by wild price movements. The longer the squeeze, the higher the probability of a strong breakout.

A look at BTC’s 5-min chart reveals that the Bollinger bands are squeezing. Since this technical index does not provide a clear path of where BTC could be headed next, the area between the lower and upper band is a reasonable no-trade zone.

A decisive move above or below this area will determine the direction of the trend.

Bitcoin USD price chart
Bollinger Bands Squeeze Signaling High Volatility. (Source: TradingView)

Nonetheless, when taking into consideration the parabolic stop and reverse, or “SAR,” we can estimate that the direction of Bitcoin is currently bullish despite the low levels of volatility.

Every time the stop and reversal points move below the price of an asset, it is considered to be a positive sign. On the flip side, when the SAR points move above the price of a given asset, it can be viewed as a bearish signal.

By taking in aggregate the Bollinger bands and the stop and reversal system, we can assume that there is a higher probability that Bitcoin will go up when volatility strikes back.

But how high can it go?

Bitcoin USD price chart
Stop and Reversal Points Turn Bullish. (Source: TradingView)

To answer this question, we can use the Fibonacci retracement indicator. This metric is based on a sequence of numbers expressed by ratios between the numbers in the series, according to Investopedia.

By plotting two extreme points, which are the most recent swing low at $9,475 and the peak of $9,820, the Fibonacci retracement indicator provides critical ratios that can be considered areas of support and resistance.

A bullish impulse that allows Bitcoin to move above the overhead resistance could see it rise towards the 127.2%, 141.4%, and, most importantly, the 161.8% Fibonacci retracement level. These resistance barriers sit approximately at $9,900, $9,960, and $10,030, respectively.

Bitcoin USD price chart
The Fibonacci Retracement Indicator Suggests the Next Major Resistance Sits at $10,030. (Source: TradingView)

At press time, we can see that the stop and reversal points accurately predicted that Bitcoin’s trend was bullish despite the consolidation phase. As the bellwether cryptocurrency broke above the resistance represented by the upper Bolliger band, it seems to be marching towards the 127.2%, 141.4%, or 161.8% Fibonacci retracement levels.

Bitcoin USD price chart
The 3 Indexes In Question Seem to Work Effectively. (Source: TradingView)

Individually, these different technical indicators may seem to provide an ambiguous outlook about future Bitcoin prices. Taken in aggregate, however, they can provide actionable information about when to enter and exit trades on the Digitex Futures Exchange.

With a good dose of patience and high levels of concentration on the charts, it is possible to minimize risk while profiting from Bitcoin’s price action.

Latest News