Analysis: Bitcoin Price Still on a Decline?

September 1, 2014 13:46 UTC

According to today’s updated Bitcoin price analysis, the exchange rate has been drawn back to yesterday’s low of near $473. The trend is still pointing down, and the indicators show scope for further decline.

This analysis update refers to an in-depth Bitcoin price analysis report published on Sunday.

[divider]CCN[/divider]

Bitcoin Price Going Down?

Looking at the hourly Bitstamp chart, price can be seen attempting to break below the central decline channel that has contained price action for the past ten days. If a breach to the downside occurs then the immediate target will be $460 which is weekly pivot support S1, overlapping with a 1.618 Fib extension of the first wave down (labelled “i/a”).

The next downside objective would be the recent low near $441 which is also the level of weekly pivot support S2.

The following target level to the downside is the lower decline channel trendline currently at $420 straight down, although by the time price reaches it, it should coincide with the 2.618 Fib extension of wave i at $412. Given the long-term significance of the lower channel trendline, as well as onset of divergence in both momentum and relative strength of the wave down, one could expect the market to react at $412.

All of the downside targets described above rely on price breaking below the central decline channel (green).

Bitcoin Price Going Up?

Should price fail to break below $473 (Bitstamp) then, a traversal of the central channel (green) would see trade return price to $500 over the next day or two.

Yesterday’s main analysis report highlighted the fact that the Bitcoin price tends to snap back to the 200-period moving average (on the 4-hour chart below) whenever it has strayed out of its envelope for too long. The 200 MA (as seen on the 4-hour chart) is currently on a descending trajectory at $540 – which also happens to be the level of the weekly pivot resistance R1 shown on the top hourly chart.

Comments About the Current Bitcoin Price Chart

It is clear from the description above that there are many confluences of levels obtained from pivots, Fibonacci extensions, channel trendlines and the 200-period moving average. Multiple level overlaps of this kind are not unusual, but the number of such confluences concentrated around this region is noticeable. It may be that we see an uptick in volatility and that price visits all of them in the coming week, or that price leaves this contentious area by evasively maneuvering away from it.

For now, a bearish bias persists but first price must breach the trendline where buyers are piling in (see BitFinex orderbook on the right). On various popular exchanges, this level is currently at:

  • $473 Bitstamp
  • $472 BTC-e
  • $471 BitFinex
  • 2,900 CNY BTC-China & Huobi

Daily updates to follow Monday through Friday.

Ongoing discussion in the CCN Traders group. View our Bitcoin Price Chart here.

Disclaimer

The writer is fully invested in Bitcoin via BTC-e and Bitfinex. Trade and Investment is risky but not as risky as some other things out there. Take care only to take action in the market when you are 100% sure of the outcome. CCN accepts no liability whatsoever for losses incurred as a result of anything written in this Bitcoin price analysis report.

Featured image from Shutterstock.

Last modified: July 12, 2015 10:45 UTC

@venzen

Market analyst and Open source developer with a keen interest in blockchain technology, consensus mechanisms and the decentralizing effect. He has found a solution to the PKI mechanism. Email me to discuss.