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Bitcoin Price Advance Rearing To Go

Rising priceBitcoin Price is rearing for a move higher. The consolidation below $400 is technically complete, and traders await the first signs of advance. Be warned that proximity to the daily 20-period MA, as well as, a New Moon opens the possibility of an unexpected bear attack. Analysis explores the potentials and their confirmation signals.

Blockchain Quotes
Global Economy
Bitcoin Price Analysis
Summary
Comments

Blockchain Quotes

Amir Taaki in an interview with Aaron van Wirdum:

This vision of Bitcoin as a faster, cheaper and better payments-network is simply not tied to any technological grounding of what Bitcoin is really about. If we want to make Bitcoin a competitor to Visa or MasterCard, we would need to increase the blocksize and centralize mining so much that it is basically the same as existing payments networks. And even then, at some point, we’ll reach a limit where Bitcoin is just not cost-efficient. We don’t need to have all these miners crunching numbers just so people can buy a coffee. That’s insane.

Matthew Sparkes interview with Daniel Larimer, Bitshares developer, seeking to to apply blockchain techn to insurance, banking and shareholding:

If you think about it, what is the reason for government? It’s a way of reaching global consensus over the theory of right and wrong, global consensus over who’s guilty and who’s innocent, over who owns what.They’re going to be losing legitimacy as more open, transparent systems are able to provide that function without having to rely on force. That’s my mission in life.

From the same article quoted above, Andreas Antonopoulos, chief security officer of Blockchain.info:

Centralised systems have one inevitable trajectory that has been validated throughout history, which is that as the people in the centre accumulate power and control they eventually corrupt the system entirely to serve their own needs, whether that’s a currency, a corporation, a nation.

Representative democracy was a solution to a scaling problem. The fact that you couldn’t get a message across Europe in anything less than a couple of weeks.

What do readers think? Please comment below.

Global Economy

S&P500

The 4-hour S&P500 chart reveals reality-bending reverse divergence as price rebounds from its first wave down. It just looks like its going to end badly.

S&P500 4h chart bitcoin

Selected Economic Data

  • US Core CPI m/m
    • expected: 0.2% (previous: 0.0.%)

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Bitcoin Price Analysis

Time of analysis: 11h45 UTC

US Session

Bitcoin price, today, completed five waves of consolidation labeled a-b-c-d-e on the folowing chart BUT with a big caveat discussed below – a close below the daily 20-period moving average ($367) signals bear attack!

Bitstamp Hourly Chart

Bitstamp bitcoin 4h chart 22Oct2014

It is possible that the consolidation stretches to seven, nine or eleven waves but at this stage we would expect an uptrend to start. It may proceed gradually – mimicking the sideways price action of the consolidation – or it may surge above $400 and advance rapidly.

Depending on the pace of the move up, it seems likely that some traders will take profit at $400 and the previous high of $417. Additional resistance may be felt at the $440 level which had acted as support and resistance during the decline.

The first major target to the upside is $460. Secondary targets are $500 and $533. The latter is uncertain because Bitcoin price does not strictly favor the .618 Fib ratios during advance – instead showing a preference for Fibonacci series numbers such as 1, 2, 3, 5, 8, 13, etc. These will be explored later in the week.

CAVEAT
Without giving preference to Moon phases, analysis considers the chart below.

Bitcoin moon phases Oct 2014

We’re going into a New Moon on Friday 24th – usually signaling a price advance. Two weeks later a Harvest Moon (orange) follows and price has in the past both rallied into Harvest Moon (November 2013) as well as crashed heavily into it (end of 2011, end 2012).

Trade defensively in the next few days until price has taken a clear direction after Friday’s New Moon.

For long positioning wait for $417 to be decisively cleared. If a decline into wave 2 becomes evident, we’ll determine buy targets in due course. It is recommended that traders avoid shorting a decline – it’s lower target is unknown and reversal is guaranteed to be swift.

Summary

A cautious analysis note today:

Although we expect advance, a daily candle close below $367 (daily 20-period moving average) cancels the prospect of immediate advance.

With a New Moon on Friday the 24th, advance is expected in the coming days, if not immediately. The speed of advance cannot be guesstimated at this time, but the sign-posts for confirmation are: 1) get above $400 and 2) advance beyond $417. Once above $417, the advance should accelerate as buyers pile in.

Wait for price to show clear direction and momentum above $417 before committing too heavily to the advance – price may reverse into November’s Harvest Moon. This is a pivotal and unknown influence on price in the coming days.

If a rally ignites, $460 is sensible target, although it may prove to be only a way-point for advance. Expect reaction at $440 and $460 on the way up

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CCN hosts a summarized Economic Calendar showing the week’s main data releases.

Readers can follow Bitcoin price analysis updates each weekday on CCN. In-depth analysis articles are published every Sunday.

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.

Bitcoin price charts from TradingView.
Images from Shutterstock.