Consolidation in Bitcoin's 1-Hour Chart
The 1-hour chart of Bitcoin presents a scene of consolidation, as the price movements of BTC show less directionality compared to longer timeframes. However, there was a sharp decline to approximately $42,056, potentially indicating a purge of stop-loss orders or a brief panic sell-off following the approval of the spot bitcoin exchange-traded funds (ETFs). Nevertheless, the market quickly recovered from this dip.
Downtrend Signals in the 4-Hour Chart
The 4-hour chart provides a clearer picture of a downtrend in Bitcoin, characterized by lower highs and lower lows. The downswings were accompanied by notably higher volume, suggesting stronger selling pressure. A resistance level has formed near $45,000, which previously acted as support. The market's path of least resistance on Wednesday is clearly downwards, indicating bearish undertones.
Confirmation of Downtrend in the Daily Chart
The daily chart reinforces the longer-term downtrend observed in the 4-hour analysis. A significant long-term support area is holding around $36,727, a level from which the price had previously experienced considerable bounce-backs. The current price action is confined within a range between this support and the approximate $45,000 resistance level. For long-term positions, entry points near the bottom of this range may be considered, with confirmation of support holding.
Neutral Stance of Oscillators on January 17, 2024
Bitcoin's oscillators on January 17, 2024, presented a predominantly neutral stance. The relative strength index (RSI) stood at 47, the Stochastic at 17, and the commodity channel index (CCI) at -61, all indicating neutrality. However, the momentum indicator at -1365 and the moving average convergence/divergence (MACD) level at 83 suggest a bearish undertone to the overall neutral outlook.
Mixed Signals from Moving Averages
Bitcoin's moving averages (MAs) also provide mixed signals. Shorter-term exponential moving averages (EMAs) and simple moving averages (SMAs) for 10, 20, and 30 days indicate negative sentiment, while longer-term averages for 50, 100, and 200 days suggest a strong bullish sentiment. This disparity highlights the tension between immediate bearish trends and a potential bullish undercurrent in the longer term.
Bullish Outlook for Bitcoin
Despite the mixed signals and short-term bearish trends, the long-term outlook for BTC remains positive. The resilience shown at major support levels, coupled with the buying interest reflected in the longer-term moving averages, suggests a potential upward trajectory. Investors with a long-term perspective may find this an opportune moment to consider entry, as the market could be gearing up for a bullish reversal.
Bearish Outlook for Bitcoin
The bearish indicators dominating the short-term charts point to an ongoing downtrend for Bitcoin. The lower highs and lower lows, particularly evident in the 4-hour chart, coupled with stronger selling pressure and bearish oscillator readings, suggest that the market could continue to face downward pressure. Short-term traders may find opportunities in short positions, capitalizing on pullbacks and resistance levels.
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Frequently Asked Questions
What proportion of your portfolio should you have in precious metals
To answer this question we need to first define precious metals. Precious elements are those elements which have a high price relative to other commodities. They are therefore very attractive for investment and trading. Gold is currently the most widely traded precious metal.
There are many other precious metals, such as silver and platinum. While gold's price fluctuates during economic turmoil, it tends to remain relatively stable. It is also unaffected significantly by inflation and Deflation.
In general, prices for precious metals tend increase with the overall marketplace. They do not always move in the same direction. For instance, gold's price will rise when the economy is weak, while precious metals prices will fall. Investors expect lower interest rates which makes bonds less appealing investments.
However, when an economy is strong, the reverse effect occurs. Investors choose safe assets such Treasury Bonds over precious metals. These precious metals are rare and become more costly.
To maximize your profits when investing in precious metals, diversify across different precious metals. It is also a good idea to diversify your investments in precious metals, as prices tend to fluctuate.
How to Open a Precious Metal IRA?
It is important to decide if you would like an Individual Retirement Account (IRA). To open the account, complete Form 8606. You will then need to complete Form 5204 in order to determine which type IRA you are eligible. This form must be submitted within 60 days of the account opening. Once you have completed this form, it is possible to begin investing. You could also opt to make a contribution directly from your paycheck by using payroll deduction.
To get a Roth IRA, complete Form 8903. Otherwise, it will be the same process as an ordinary IRA.
You'll need to meet specific requirements to qualify for a precious metals IRA. You must be at least 18 years of age and have earned income to qualify for a precious metals IRA. For any tax year, your earnings must not exceed $110,000 ($220,000 for married filing jointly). You must also contribute regularly. These rules apply to contributions made directly or through employer sponsorship.
A precious metals IRA can be used to invest in palladium or platinum, gold, silver, palladium or rhodium. But, you'll only be able to purchase physical bullion. This means you won't be allowed to trade shares of stock or bonds.
You can also use your precious metals IRA to invest directly in companies that deal in precious metals. This option is available from some IRA providers.
However, investing in precious metals via an IRA has two serious drawbacks. First, they aren't as liquid than stocks and bonds. This makes it harder to sell them when needed. Second, they don't generate dividends like stocks and bonds. Also, they don't generate dividends like stocks and bonds. You will eventually lose money rather than make it.
What is the value of a gold IRA
The benefits of a gold IRA are many. It's an investment vehicle that lets you diversify your portfolio. You decide how much money you want to put into each account, and when you want it to be withdrawn.
Another option is to rollover funds from another retirement account into a IRA with gold. This is a great way to make a smooth transition if you want to retire earlier.
The best part is that you don't need special skills to invest in gold IRAs. These IRAs are available at all banks and brokerage houses. You don't have to worry about penalties or fees when withdrawing money.
But there are downsides. The volatility of gold has been a hallmark of its history. Understanding why you invest in gold is crucial. Are you looking for safety or growth? Is it for security or long-term planning? Only after you have this information will you make an informed decision.
If you want to keep your gold IRA open for life, you might consider purchasing more than one ounce. One ounce doesn't suffice to cover all your needs. Depending on the purpose of your gold, you might need more than one ounce.
You don't have to buy a lot of gold if your goal is to sell it. You can even get by with less than one ounce. However, you will not be able buy any other items with those funds.
What is the tax on gold in an IRA
The fair market value at the time of sale is what determines how much tax you pay on gold sales. If you buy gold, there are no taxes. It isn't considered income. If you decide to sell it later, there will be a taxable gain if its price rises.
As collateral for loans, gold is possible. Lenders try to maximize the return on loans that you take against your assets. For gold, this means selling it. However, there is no guarantee that the lender would do this. They might keep it. They might decide to sell it. You lose potential profits in either case.
In order to avoid losing your money, only lend against your precious metal if you plan to use it to secure other collateral. Otherwise, it's better to leave it alone.
Is it a good retirement strategy to buy gold?
While buying gold as an investment may seem unattractive at first glance it becomes worth the effort when you consider how much gold is consumed worldwide each year.
The most popular form of investing in gold is through physical bullion bars. But there are many other options for investing in gold. Research all options carefully and make an informed decision about what you desire from your investments.
For example, purchasing shares of companies that extract gold or mining equipment might be a better option if you aren't looking for a safe place to store your wealth. Owning gold stocks should work well if you need cash flow from your investment.
You also can put your money into exchange-traded funds (ETFs), which essentially give you exposure to the price of gold by holding gold-related securities instead of actual gold. These ETFs typically include stocks from gold miners, precious metallics refiners, commodity trading companies, and other commodities.
What is a gold IRA account?
The Gold Ira Accounts are tax-free investment options for those who want to make investments in precious metals.
You can purchase physical bullion gold coins at any point in time. To invest in gold, you don't need to wait for retirement.
An IRA allows you to keep your gold forever. When you die, your gold assets won't be subjected to taxes.
Your gold will be passed on to your heirs, without you having to pay capital gains taxes. It is not required that you include your gold in the final estate report because it remains outside your estate.
You'll first have to set up an individual retirement account (IRA) to open a gold IRA. Once you've done that, you'll receive an IRA custody. This company acts as a middleman between you and the IRS.
Your gold IRA custodian is responsible for handling all paperwork and submitting the required forms to the IRS. This includes filing annual returns.
Once you've established your gold IRA, you'll be able to purchase gold bullion coins. Minimum deposit is $1,000 If you make more, however, you will get a higher interest rate.
When you withdraw your gold from your IRA, you'll pay taxes on it. If you are withdrawing your entire balance, you will owe income tax plus a 10% penalty.
Even if your contribution is small, you might not have to pay any taxes. However, there are exceptions. However, there are exceptions. If you take 30% or more of your total IRA asset, you'll owe federal Income Taxes plus a 20% penalty.
It's best not to take out more 50% of your total IRA investments each year. Otherwise, you'll face steep financial consequences.
What amount should I invest in my Roth IRA?
Roth IRAs let you save tax on retirement by allowing you to deposit your own money. You can't withdraw money from these accounts before you reach the age of 59 1/2. However, if you do decide to take out some of your contributions before then, there are specific rules you must follow. First, your principal (the deposit amount originally made) is not transferable. No matter how much money you contribute, you cannot take out more than was originally deposited to the account. If you wish to withdraw more than you originally contributed, you will have to pay taxes.
The second rule is that you cannot withdraw your earnings without paying income taxes. When you withdraw, you will have to pay income tax. Let's take, for example, $5,000 in annual Roth IRA contributions. In addition, let's assume you earn $10,000 per year after contributing. The federal income tax on your earnings would amount to $3,500. The remaining $6,500 is yours. Because you can only withdraw what you have initially contributed, this is all you can take out.
If you took $4,000 from your earnings, you would still owe taxes for the $1,500 remaining. Additionally, half of your earnings would be lost because they will be taxed at 50% (half the 40%). Even though you had $7,000 in your Roth IRA account, you only received $4,000.
There are two types: Roth IRAs that are traditional and Roth. Traditional IRAs allow pre-tax contributions to be deducted from your taxable tax income. You can withdraw your contributions plus interest from your traditional IRA when you retire. You can withdraw as much as you want from a traditional IRA.
Roth IRAs won't let you deduct your contributions. After you have retired, the full amount of your contributions and accrued interest can be withdrawn. There is no minimum withdrawal required, unlike a traditional IRA. You don't need to wait until your 70 1/2 year old age before you can withdraw your contribution.
Statistics
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (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)
External Links
finance.yahoo.com
wsj.com
- Saddam Hussein's InvasionHelped Uncage a Bear In 90 – WSJ
- You want to keep gold in your IRA at home? It's not legal – WSJ
law.cornell.edu
- 7 U.S. Code SS7 – Designation boards of trade as contract market authorities
- 26 U.S. Code SS 408 – Individual retirement funds
irs.gov
How To
Three ways to invest in gold for retirement
It is crucial to understand how you can incorporate gold into your retirement plans. You can invest in gold through your 401(k), if you have one at work. You might also be interested to invest in gold outside the workplace. A custodial account can be opened by a brokerage firm like Fidelity Investments if you already have an IRA. Or, if you don't already own any precious metals, you may want to consider buying them directly from a reputable dealer.
These are the rules for gold investing:
- Buy Gold with Your Money – You don't need credit cards, or to borrow money to finance your investments. Instead, instead, transfer cash to your accounts. This will help you to protect yourself against inflation while also preserving your purchasing power.
- Physical Gold Coins You Should Buy – Physical gold coins should be purchased over a paper certificate. Physical gold coins can be sold much faster than paper certificates. Physical gold coins don't require storage fees.
- Diversify Your Portfolio. Never place all your eggs in the same basket. This is how you spread your wealth. You can invest in different assets. This helps to reduce risk and provides more flexibility when markets are volatile.
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By: Jamie Redman
Title: Bitcoin Technical Analysis: BTC Maintains Above $42,000 Amidst Downtrend Signals
Sourced From: news.bitcoin.com/bitcoin-technical-analysis-btc-balances-above-42000-amidst-downtrend-signals/
Published Date: Wed, 17 Jan 2024 14:48:44 +0000
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