Bitcoin at $5700: Selling Into Strength (14.10.2017)

Bitcoin’s price has reached an extremely overbought reading, with a top near $5900, regarding short-term momentum after this morning’s surge, triggering a downgrade of our trend model from Buy to Neutral after the initial signal on the 25th of September. We urge traders to only leave small positions open (just to fight the Fear of Missing Out) and wait for better re-entry points that will surely emerge.

BTC/USD 4-Hour Chart Analysis (Bitstamp Prices)

Long-Term Prospects

Although, the long-term picture still leaves space for further advance, catching the exact top is nearly impossible, and the current conditions are not favorable for opening new positions, while our long-term model also turned neutral today. With more favorable risk/reward opportunities among the altcoins, such as Ethereum, Monero, and Litecoin, investors should take some chips off the table, even as a rally to $7000 is still a possibility (completing a range extension trade off the China-crash lows). As the long-term momentum readings are still not extreme, we would definitely keep our core positions open, depending, of course, on one’s investment strategy.

Market Back at $175 billion, Next Stop $200 billion?

With Bitcoin’s stellar rise, the capitalization of the segment hit $175 billion again, reaching the all-time high set before the correction that was accelerated by the Chinese regulatory changes. Ethereum might be on the verge of taking over the short-term leadership, as the coin is showing encouraging strength today, and the Byzantium update, due in three days time, is looking smoother than ever.

ETH/USD 4-Hour Chart Analysis (Kraken Prices)

The second largest coin is testing the $330 level as we speak, and the coin still has ways to go to reach the previous all-time high at $400 and end the 4-month long correction. A further resistance level is looming at $380, but if the capital flows towards the segment remain as positive as they are today, a test of the all-time high is very likely, and the market cap of the coins could reach the $200 billion soon.