The Bitcoin price is consolidating below $400. Trend has achieved a several confirmations of advance and some others are yet to be printed in the chart. We consider the outlook for the week and also look at other key indicators.
An important week ahead in the economic calendar. Inflation figures for Australia, New Zealand and the US will be released, as well as, GDP data for China and the UK. Several manufacturing measures (China, Germany and the US) will weigh on the general view that a global slowdown has begun.
We've been tracking the S&P500 Index and its plummeting below several levels of long-term support.
Meanwhile, the US Dollar Index (DXY) looks like it wants to keel over, but it won't. The end of QE (this month) means the end of years of outright Dollar devaluation and the "King of Cash" is about to start a steady multi-month upward trajectory as it re-inflates.
Gold is completing a corrective triangle in a long-term downtrend. Currently, the Gold price is making its way up to the end of wave D before a final decline to the bottom somewhere between $980-$700. However, due to the extended run during its final fifth wave of advance a much lower bottom could be struck in the region of $400. Not many Gold bugs want to believe that about their "Precious", but the Elliott Waves never lie...
Bitcoin Price Analysis: Advance
The Bitcoin price continues consolidation under $400.
BTC-China Bitcoin Price Chart
The daily BTC-China chart shows the current area of price action above the green daily 20-period moving average. The dark blue 200-period moving average (200MA) is an intermediate target and getting above that moving average will be the final confirmation that an advancing trend is in effect.
However, it may be prudent not to wait for price to achieve the daily 200MA before taking a long position because there is no guarantee that price is going to exceed $700 on this run-up. I cannot pin-point my suspicion yet, but there is something odd about this wave of advance - we know it's not a corrective component of the previous declining wave - it's a new advancing wave - but it does not yet display the right look or structure for a new Bitcoin moon rocket...
Perhaps collusion between the current bunch of centralized exchanges is killing trade. Perhaps the institutional players are trying to suppress advance for reasons only they know. Perhaps the long-standing obsession with making Bitcoin a payment protocol suitable for casual purchases at Starbucks and other middle-class haunts... Nevermind. Let's see where price gets to this time - it may yet print another wave that fixes its structure in a way that is suitable for the long-haul above $1,500.
Bitstamp Bitcoin Price Chart
The hourly Bitstamp chart shows the moving averages funnel into which price is consolidating.
Above is the 1000MA (magenta) and below, the 250MA (red). Evidently, the period of the lower MA defines price action better at 250 than when set to 200. This is true on the hourly chart.
There are some heavy hands in the market, so price may breach these MAs, but the expectation is for a narrowing consolidation below $400 before swinging gently to the upside. Price may take off more like a big bird than like a space rocket.
The Bitcoin price is consolidating sideways before a move above $400. If you're an investor, buy below $400 and hold. If you're a leveraged trader then consider your swap costs payable to the centralized exchange before getting in long. You may want to wait for the move above $400 and then the confirming break above $417 before going long at maximum leverage with an initial stop below where the centralized exchanges can "flash" it during volatile periods.
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Readers can follow Bitcoin price analysis updates each weekday on CCN. In-depth analysis articles are published every Sunday.
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.