Bitcoin price reacted little to the Fed’s confirmation of additional rates increases during 2016. Half the market is passively accumulating via limit orders placed just below price, the other half is actively selling at market.
Bitcoin Price Analysis
Time of analysis: 15h00 UTC
BTCC 4-Hour Chart
From the analysis pages of xbt.social, earlier today:
In their announcement yesterday, the Federal Open Market Committee retained the target range for the federal funds rate at between 0.25% and 0.5%. The average of policy makers’ new “dot-plots” projects a rate of 0.875% by the end of 2016. The implication is that the Fed will enact two 0.25% rates increases during 2016.
The US dollar weakened across the board, on the news, but gold shot up almost $30 on the announcement. The reason, ostensibly, is that the Fed cited a “weak global economy” as the reason for their decision (think safe haven) and have forecast two more hikes (and not canceled until further notice, as the market assumed) – again, think safe haven. Hence gold reached for its prior 2016 highs.
Bitcoin hardly showed any price reaction. Perhaps the bitcoin market expected something more austere – such as a Cyprus-style or Greek currency crisis. Perhaps bitcoin market participants are still mulling their investment options and risk in light of the Fed’s dramatic-by-implication message between the lines.
The 4-hour chart remains below the 200MA (red) in the BTCC chart, and others, but the OKCoin and Bitstamp charts are above their 200MA. Not sure why this is – perhaps a consortium is trying to pump price in those exchanges. Unfortunately, they’ve chosen an upward corrective wave and any price pumping could potentially result in a more drastic reversal.
If the exchange charts begin to confirm one another’s indications – whether to the upside or the down – that’s when we can confidently start building position.
Although we are getting buy signals in most timeframes price remains at (and mostly below) its descending 1-day 20MA in all exchanges. Until we see an advance above the 1-day 20MA we have no good reason to trade this choppy wave to the upside.
Let’s remain very patient with the current price action.
The price wave continues resembling a sideways correction that is printing lots of zig-zagging 3-wave structures. The longer such a corrective triangle drags out, the more severe the subsequent sell-off could be. If the market can start tracing some longer green candles to higher highs, the bias would turn near-term bullish.
Bitfinex Depth Chart and Buy/Sell Volume
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Bitcoin price charts from TradingView.
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