Bitcoin Technical Analysis: BTC 15th Anniversary Celebrations Marred by Market Mayhem

Bitcoin Price Fluctuations and Market Overview

In the wake of bitcoin's 15th anniversary, the cryptocurrency behemoth confronts a challenging market terrain, as its price dipped 6.7% to prices between $42,350 to $42,619 amidst swirling rumors of spot bitcoin exchange-traded fund (ETF) rejections.

The past day saw bitcoin's price range fluctuate between $41,804 and $45,813 with a market capitalization of $832 billion and trading volume of around $35.96 billion. The oscillators and moving averages hint at a diverging sentiment: while the momentum and moving average convergence/divergence (MACD) level indicate bearish action, there's a strong bullish signal from the exponential and simple moving averages, especially over longer periods (50, 100, and 200 days).

Analyzing Bitcoin's Technical Indicators

A detailed look reveals a neutral stance in the relative strength index (RSI), Stochastic, commodity channel index (CCI), average directional index, and awesome oscillator. Yet, the selling pressure is evident with a negative momentum and MACD Level. The moving averages predominantly show bullish sentiment, especially in longer time frames, suggesting the optimistic undercurrent remains.

Daily Chart Analysis

The daily chart depicts a dramatic narrative – a significant uptrend followed by a precipitous decline, with the recent large daily red candle signifying the strong selling pressure. This was precluded by a consolidation phase, likely an accumulation before a sell-off. The transition from bullish to prominent bearish flags signals a reversal, marking an exit point just before the decline.

4-Hour Chart Analysis

Zooming into the 4-hour chart, the recent price surge followed by a steep downturn is evident. The entry and exit points become clearer with this granularity; an upward trend confirmation was the green light for entry, while an ideal exit was at the peak or as the downturn formed, breaking below the previous low, hinting at a momentum shift.

1-Hour Chart Analysis

The 1-hour chart offers an acute perspective of the rapid price fall, characterized by the day’s large dip. This granularity is particularly beneficial for short-term traders seeking quick trades within consolidation phases. The exit strategy aligns with the 4-hour chart, emphasizing the break below the support level from previous areas as the cue to avoid further downturns.

Bull Verdict: Potential for an Upward Trajectory

Despite recent downturns and market volatility, the longer-term moving averages and certain oscillators suggest an underlying bullish sentiment. If the market can leverage this period of consolidation as a springboard, coupled with significant historical support levels holding firm, there’s potential for an upward trajectory. As bitcoin celebrates its 15th anniversary, the innovative spirit and growing adoption could catalyze a resurgence, especially if external factors like ETF approvals turn favorable.

Bear Verdict: Worrisome Picture for Bitcoin

The sharp decline indicated in the daily and shorter-term charts, accompanied by negative momentum and MACD levels, paints a worrisome picture for bitcoin. The selling pressure and break below key psychological and technical support levels suggest a continuation of the bearish trend. If external market forces, such as the potential rejection of spot bitcoin ETFs, materialize negatively, it could further erode investor confidence and lead to a sustained downturn. In this light, the current market conditions might be seen as a precursor to more significant losses, warranting a cautious approach for those looking to preserve capital.

What do you think about bitcoin's market action on Wednesday? Share your thoughts and opinions about this subject in the comments section below.

Frequently Asked Questions

Can the government take your gold

Because you have it, the government can't take it. It is yours because you worked hard for it. It is yours. There may be exceptions to this rule. Your gold could be taken away if your crime was fraud against federal government. Your precious metals can also be lost if you owe tax to the IRS. However, even if taxes are not paid, gold is still your property.

What precious metal should I invest in?

Answering this question will depend on your willingness to take some risk and the return you seek. Gold is a traditional haven investment. However, it is not always the most profitable. For example, if your goal is to make quick money, gold may not suit you. Silver is a better investment if you have patience and the time to do it.

If you don’t want to be rich fast, gold might be the right choice. If you are looking for a long-term investment that will provide steady returns, silver may be a better choice.

How much should I contribute to my Roth IRA account?

Roth IRAs are retirement accounts where you deposit your own money tax-free. These accounts are not allowed to be withdrawn before the age of 59 1/2. If you decide to withdraw some of your contributions, you will need to follow certain rules. First, your principal (the original deposit amount) cannot be touched. This means that regardless of how much you contribute to an account, you cannot take out any more than you initially contributed. If you wish to withdraw more than you originally contributed, you will have to pay taxes.

The second rule is that your earnings cannot be withheld without income tax. Withdrawing your earnings will result in you paying taxes. Consider, for instance, that you contribute $5,000 per year to your Roth IRA. Let's further assume you earn $10,000 annually after contributing. The federal income tax on your earnings would amount to $3,500. You would have $6,500 less. Since you're limited to taking out only what you initially contributed, that's all you could take out.

You would still owe tax on $1,500 if you took out $4,000 of your earnings. In addition, 50% of your earnings will be subject to tax again (half of 40%). Even though you had $7,000 in your Roth IRA account, you only received $4,000.

Two types of Roth IRAs are available: Roth and traditional. Traditional IRAs allow for pre-tax deductions from your taxable earnings. Your traditional IRA allows you to withdraw your entire contribution plus any interest. There are no restrictions on the amount you can withdraw from a Traditional IRA.

Roth IRAs are not allowed to allow you deductions for contributions. Once you are retired, however, you may withdraw all of your contributions plus accrued interest. There is no minimum withdrawal amount, unlike traditional IRAs. You don't need to wait until your 70 1/2 year old age before you can withdraw your contribution.

How is gold taxed by Roth IRA?

An investment account's tax is calculated based on the current value of the account, and not on what you paid originally. Any gains made by you after investing $1,000 in a stock or mutual fund are subject to tax.

You don't pay tax if you have the money in a traditional IRA/401k. Dividends and capital gains are exempt from tax. Capital gains only apply to investments more than one years old.

The rules that govern these accounts differ from one state to the next. Maryland requires that you withdraw funds within 60 business days after reaching the age of 59 1/2. In Massachusetts, you can wait until April 1st. New York offers a waiting period of up to 70 1/2 years. To avoid penalties, plan ahead so you can take distributions at the right time.

Statistics

If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
(Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)

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A rising trend in gold IRAs

As investors seek to diversify their portfolios while protecting themselves from inflation, the trend towards gold IRAs is on the rise.

Owners can invest in gold bars and bullion with the gold IRA. It is a tax-free investment that can be used to grow wealth and offers an alternative investment option to those who are concerned about stocks or bonds.

Investors can manage their assets with a gold IRA without worrying about market volatility. They can use the gold IRA to protect themselves against inflation and other potential problems.

Investors also benefit from physical gold's unique properties, such as durability and portability.

In addition, the gold IRA offers several other advantages, including the ability to quickly transfer ownership of the gold to heirs and the fact that the IRS does not consider gold a currency or a commodity.

This is why the gold IRA has become increasingly popular with investors looking to provide financial security during times of financial uncertainty.

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By: Jamie Redman
Title: Bitcoin Technical Analysis: BTC 15th Anniversary Celebrations Marred by Market Mayhem
Sourced From: news.bitcoin.com/bitcoin-technical-analysis-btc-15th-anniversary-celebrations-marred-by-market-mayhem/
Published Date: Wed, 03 Jan 2024 14:30:56 +0000