1/ Bitcoin in Consolidation
2/ Alphabet Make or Break?
3/ Energy Infrastructure Uptrend]
Investopedia is partnering with CMT Association on this newsletter. The contents of this newsletter are for informational and educational purposes only, however, and do not constitute investing advice. The guest authors, which may sell research to investors, and may trade or hold positions in securities mentioned herein do not represent the views of CMT Association or Investopedia. Please consult a financial advisor for investment recommendations and services.
1/
Bitcoin in Consolidation
Since hitting an all time high in March, Bitcoin has been consolidating within a descending channel. To understand how far the price might retrace, technicians utilize Fibonacci retracement levels to help identify important technical levels of support and resistance. Fibonacci levels are arrived at by first measuring a complete trend up or down, in this case the uptrend from the November 2022 low to the above mentioned highs. From there, a minimum of three levels can be calculated: a 38.20% retracement, a 50% and a 61.80% retracement of the measured move. I like to add the 23.60% as well as the 78.60%. These calculated levels then act as support on the way down for price, and once surpassed, they then act as resistance levels.
As shown here below, the price of Bitcoin is oscillating between the 23.60% ($60’000 area), currently acting as resistance, and the 38.20% ($51’500 area), currently acting as resistance:
The MACD is offering an additional technical piece of confirming evidence that the downtrend off the March 2024 peak remains in place, further downside potential appears technically viable, notwithstanding the expected interim rallies, until the price is able to break out of its descending channel.
2/
Alphabet Make or Break?
On this weekly chart, we can see how Alphabet (Google) set an interim high around $150 in November 2021. This level has been tested four times in late 2021 and one more time in early 2022. From that point onwards, the price action took two years to create a basing pattern before hitting that $150 resistance area again. It did so a few times during the first two months of this year. The price has always been rejected, until it gapped up in March. That whole price action created a Cup and Handle pattern:
From there, the price broke through the $150 resistance area and confirmed it as support level in April. The price is currently reverting down since the July high and has now closed back into the $150 support area.
Will Alphabet be able to bounce off that support or will the price break down to fill that $143-$146 gap? Technically, the longer a given level (support, resistance or trendline) has been in place, the more technically significant that level becomes.
3/
Energy Infrastructure Uptrend
Since its low in March 2020, MLPX (Global X MLP & Energy Infrastructure ETF) has made higher lows and higher highs which is the definition of an uptrend. (There were some lower highs during a consolidation phase between June 2022 and February 2024).
Based on Fibonacci extension measurements taken from the June 2022 to July 2022 decline (in other words, the highs and lows of the aforementioned consolidation period), we can project upside targets for MLPX.
MLPX has now lifted through its first Fibonacci price resistance at $52.20 and appears poised to address the next Fibonacci level at $62.33, notwithstanding interim pullbacks.
Offering additional technical evidence is the RSI, since it has alleviated from its oversold condition in April 2020, it has never gone below 35 and has been overbought (a sign of strength as it is evidence of buying interest) a few times, which denotes a bullish regime.
—-
Originally posted 9th September 2024
Disclosure: Investopedia
Investopedia.com: The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment or strategy. This information is intended for US residents only.
Disclosure: Interactive Brokers
Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.
This material is from Investopedia and is being posted with its permission. The views expressed in this material are solely those of the author and/or Investopedia and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Disclosure: ETFs
Any discussion or mention of an ETF is not to be construed as recommendation, promotion or solicitation. All investors should review and consider associated investment risks, charges and expenses of the investment company or fund prior to investing. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Disclosure: Cryptocurrency based Exchange Traded Products (ETPs)
Cryptocurrency based Exchange Traded Products (ETPs) are high risk and speculative. Cryptocurrency ETPs are not suitable for all investors. You may lose your entire investment. For more information please view the RISK DISCLOSURE REGARDING COMPLEX OR LEVERAGED EXCHANGE TRADED PRODUCTS.
Disclosure: Forex
There is a substantial risk of loss in foreign exchange trading. The settlement date of foreign exchange trades can vary due to time zone differences and bank holidays. When trading across foreign exchange markets, this may necessitate borrowing funds to settle foreign exchange trades. The interest rate on borrowed funds must be considered when computing the cost of trades across multiple markets.
Join The Conversation
If you have a general question, it may already be covered in our FAQs. If you have an account-specific question or concern, please reach out to Client Services.