Bitcoin has reached new highs this week against fiat currencies: ₩21.8 million is a fresh all-time high, higher than the peak three years ago slightly above ₩20.5 million. Sentiment is very positive as ‘risk on’ continues in most markets, while record low interest rates are the rule around the world. Today’s technical analysis of BTCKRW looks at the four-hour chart plus futures and transferable volume.
There is no clear resistance on this chart; however, the latest high slightly below ₩22 million could be established as a barrier zone if price consolidates for a few periods. Low support occurs around ₩18 million, but moving averages are likely to be more important over the next few days than this fairly distant area.
Moving averages continue to give a strong buy signal, with all three of the 50, 100 and 200 SMAs successively above slower ones and below the price. The main zone of support from MAs on this timeframe is the value area between the 50 SMA from Bands and the 100.
While Bollinger Bands (50, 0, 2) do not currently signal overbought, the slow stochastic (15, 5, 5) at 87 is clearly within the zone of buying saturation. Expanding Bands do indicate higher volatility to come, though. Volume for this CFD remains fairly consistent with the average in November.
The latest upward wave is clearly a fundamental movement given the number of up candles, some of which with very large real bodies. The long-tailed doji from 16.00 GMT yesterday should probably not be ignored; coming in the context of a new all-time high amid overbought from the stochastic, it might signal consolidation or another pullback to come.
₩18 million was strengthened significantly as a support in the second half of last week by the presence of both the 38.2% daily Fibonacci retracement area and the 38.2% zone from the daily Fibo fan. As price has now moved quite far above this zone and, crucially, above the important psychological area of ₩20 million, we might expect the next Fibo confluence – the 23.6% retracement with the 38.2% fan – to function as the next key support.
Futures on bitcoin against the dollar cannot provide a reliable signal at the moment given very low volume. A total of only 173 is close to the lowest three-month volume for futures on BTCUSD in 2020, reflecting the typical drawing down of activity at this time of year with Christmas and New Year approaching. The contango to February is slightly more than 2%, a normal situation, but volume of only one for February means that the impression from futures could change rapidly if trading picks up.
Transferable volume for bitcoin against the dollar (all major exchanges) presents a different picture from volume for CFDs. Here we can see a spike in buying around the latest pullback, with volume over $2 billion last Tuesday. There is evidence of both buying the dips and buying strength.
Overall the technical picture for bitcoin-won is very positive and, with no clear resistance on the four-hour chart, we can expect new highs sooner or later. However, a retracement or consolidation downward is favourable over the next few weeks before these given the current situation of overbought and extension significantly beyond the daily Fibonacci fan.
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