Bitcoin Price Advance Picks Up The Pace

November 4, 2015 19:07 UTC

Another day and another overhead Fib line achieved in the persistent bitcoin price rally. Price has fallen back just below $500 and 3300 CNY, and looks certain to continue higher in the coming days.

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Bitcoin Price Analysis

Time of analysis: 16h18 UTC

BTC-China 1-Hour Chart

From the analysis pages of xbt.social, earlier today:

The indicator divergence is stupendous – have a look at the stochastics (second from top) flashing red on every wave up. RSI (third from top) has diverged to last week’s high and is now diverging on each wave high since yesterday. Regardless, during strong advance this condition can persist for weeks and we have to look for reverse divergence instead – not to try to call the top but, instead, look for signals that confirm continuation.

Besides technical analysis, there is another, more esoteric analytical tool: assessing market mood.

Optimism is peaking. For three days, it has been possible to buy into the advance at any time and at any level and the position will be in profit within a few hours if not within minutes. Optimism generates this type of buy-with-abandon behavior and when the majority least expect it – and are positioned long to the max – that is when the surprise is most likely to happen.

The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell. – John Templeton

Summary

The proposal is that price either enters a large correction around 3000CNY, or quickly moves on, amidst the current exuberance. Given the technical and mood assessments above, a correction between the magenta annotations next to price is likely as the market negotiates the significant 3000 CNY level. The Fib line running through the center of the area may contain downward correction, but, either way trend remains up. During the correction, we can observe the wave pattern and MA interaction to determine where-to next. It could be a thunderous advance to 5000 CNY.

For now, traders should wait for price to push above magenta level annotated just above price (3350 CNY and $500 (Bitstamp)) before buying into the trend.

Bitfinex orderbook depth and Buy/Sell Volume:

Click here for the CCN.LA interactive bitcoin price chart.

What do readers think? Please comment below.

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Disclaimer

The writer trades Bitcoin. Trade and Investment is risky. CCN.LA accepts no liability for losses incurred as a result of anything written in this Bitcoin price analysis report.

Bitcoin price charts from TradingView.
Image from Shutterstock.

Last modified: November 4, 2015 19:12 UTC

Posted in: News
@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.

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