Bitcoin price has surged higher after a protracted consolidation below 2900 CNY and $440. Technical analysis of the price chart identifies some advance targets.
Time of analysis: 14h30 UTC
From the analysis pages of xbt.social, earlier today:
It is difficult to ascribe reasons or causes for today’s surge. According to the most immediate risk event – the potential XT hardfork on 11 January – today’s move could be judged premature.
It is also easy to point to this week’s China stock market crash and say that investor fear, compounded by a government imposed stocks selling ban, is driving funds into bitcoin. However, we cannot be sure that this is the only or main dynamic at work. It may be that the market rallies higher only to sell off when it reaches the highs of late-2015.
A conservative Fib extension drawn from the consolidation’s initial wave up, shows that price is still short of its typical upside target at 1.618 (orange annotation). Higher overhead there is an ascending Fib line crossing through 3120 CNY straight above. This level coincides with the December high. This may represent the present advancing wave’s target.
Should advance continue we have a 2.618 Fib extension target at 3300 CNY and $475 (Bitstamp). If the market avoids a triple top reversal, then advance should eventually continue well beyond the 2.618 extension.
Bitcoin price is rallying toward a potential triple top. The best thing traders can do, in terms of risk control, is to gradually move higher a stop-loss at a reasonable distance below price in order to lock in profits should the market reverse between now and the 11th of January. Despite the looming XT risk event, the chart looks strongly bullish – the MA buy signals are more well-formed than they were at the late-November surge.
What do readers think? Please comment below.
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Bitcoin price charts from TradingView.
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