Bitcoin price is, at the time of writing, breaking out of a consolidation above $600. The market has noticed and the chatrooms are speculating if this is a time to buy. Technical analysis confirms the corrective rally proposed in yesterday’s analysis.
Bitcoin Price Analysis
Time of analysis: 11h00 UTC
Bitstamp 1-Hour Candle Chart
From the analysis pages of xbt.social, earlier today:
Bitcoin price had been sticking to the Fib line near $633 (Bitstamp) and the 4hr 200MA (not shown) has risen up into the area of price action to provide additional support.
After a period of consolidation, MACD Bollinger Band compression confirms the onset of price volatility.
This is the typical configuration prior to a breakout, and analysis posted at xbt.social earlier today presumed that direction will be to the upside since the market had passed several opportunities to decline, while holding support of the 4hr 200MA, as well as the Fib fan line from January 2015.
Upside targets are at $680 (Bitstamp), $700 and, potentially $755 near the previous top. The upside wave is expected to make bumpy – even jagged – progress, since the market is trading price up in a correction. If this indeed turns out to be the case, then we’d expect to see price eventually return to $650, or even $600, after a strained wave high – somewhere in the vicinity of the previous top.
A dynamic stop-loss is likely to get you accidentally knocked out (due to a bumpy corrective advance), but remains the recommended xbt.social method of exiting position. Alternatively, traders could exit at each Fib extension level as it is achieved, but finding a re-entry could prove difficult. The overlap of Fib extensions around $755 is significant, yet an interim correction should occur (between $700 and $650) before price hits that primary target.
Readers will note that there is no market news or significant event that has catalyzed this move. This serves to illustrate how the market moves according to its own internal speculative cycles, without any connection to fundamentals, sentiment or other external causes.
Don’t worry about what the markets are going to do, worry about what you are going to do in response to the markets. – Michael Carr
Yesterday’s analysis remarked that a push above the red 200MA, today, will indicate that a consolidation floor had formed at $600 and that MACD (panel above price) will follow a price breakout to the upside. This combination will signal the start of another potentially large wave of advance to $755.
Bitfinex Depth Chart and Buy/Sell Volume
What do readers think? Please comment below.
Readers can follow Bitcoin price analysis updates every day on CCN.LA. A Global Economic Outlook report is published every Monday.
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.
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