Posted in: Archive
Published:
October 13, 2014 3:02 PM UTC

Bitcoin Price Analysis and IMF Markets Warning

The Bitcoin price has made an easy turn off the bottom of the advancing wave and is proceeding higher amidst optimistic trade today. An IMF special report, entitled the "Global Financial Stability Report", was published today and warns of potential shocks and increased volatility in…

The Bitcoin price has made an easy turn off the bottom of the advancing wave and is proceeding higher amidst optimistic trade today. An IMF special report, entitled the “Global Financial Stability Report”, was published today and warns of potential shocks and increased volatility in global markets.

Links to Sections:

IMF Warning: Low Liquidity and Volatility
Global Economy
Bitcoin Price Analysis
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IMF Warning: Low Liquidity and Volatility

The extended period of monetary accommodation and the accompanying search for yield are leading to credit mispricing and asset price pressures, increasing the chance that financial stability risks could derail the recovery.
– IMF Global Financial Stability Report

The International Monetary Fund’s Global Financial Stability Report, released today, warns of increased liquidity risks and volatility in global markets.

For more about the expected effect of volatility on the Bitcoin price, see today’s detailed article about the IMF report.

Also read: IMF – Banks To Manage Perception

Global Economy

In line with the preconditions discussed in today’s IMF report, equities are down, and the US Dollar and Gold are advancing.

Gold

Gold has reached its 200MA (red) and we can expect some reactivity around the $1,230 level as trade attempts to climb above the 200MA and then attempts the daily 200MA which is presently on a level trajectory at $1,285.

S&P500

The downtrend in global equity markets is a reason for concern. The following S&P500 chart shows the devastation of the past few weeks’ decline. The sheer size of that declining wave structure does not bode well for the shape of things to come. A partial upward correction could be expected at current levels, but if the absence of QE prompts a flight from equities to traditional safe havens – Gold and bonds – then the sell-off could be epic. Epic in a bad way.

US Dollar

The US dollar is the subject of much criticism and vilification these days. Many people, including analysts, are expressing negative sentiment toward the Dollar, yet, regardless, the chart shows that the US Dollar could surprise it’s detractors and make another new high.

The “King of Cash” is likely to retain its undisputed title for many years to come. Bitcoin fans should bear in mind that many economies and sub-economies in various countries use the Dollar as a yardstick of value and transactions settlements, ranging from local market purchases to private sales to central bank forex reserves. Bitcoin’s role as a speculative instrument (commodity) renders it useless as a stable pricing currency at present. Thanks, in part, to the community’s passive consent to Bitcoin’s regulation, we will soon be seeing numerous Bitcoin-based ETFs that will increase Bitcoin’s volatility even more. You get what you ask for.

China

China’s Trade Balance came in at a dismal figure of $31 billion. This is $10 billion less than expected and $18 billion less than the previous figure of $49.8 billion. The implication is that global trade is slowing down – despite wishful yarns about “recovery” from economists and central banks. China is, consequently, bound to introduce some form of QE to make itself more competitive against the Yen, and this is dangerous path, as discussed previously.

Selected Economic Data

  • China Trade Balance
    • expected: 41.2B (previous: 49.8B)
    • actual: 31.0B

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Bitcoin Price Analysis

Asian Session

Time of analysis: 09h00 UTC
Over the weekend price completed a corrective triangle above the hourly 200MA before resuming the advance on Sunday.

As mentioned by a reader yesterday, today sees an important chart signal in that the daily price candle has risen above the daily 20-period moving average. It needs to close above the daily 20MA to confirm advance to the daily 200MA.

Bitstamp Daily Chart

European Session

Time of analysis: 10h15 UTC
The advancing wave structure is more clearly visible today. The following Bitstamp hourly chart shows price pulling away above both the 20 and 200MA. This is a very bullish signal.

Bitstamp Hourly Chart

Summary

Expect price to climb above $400 and to react to the rising support and resistance line near $425 (light grey on the chart). There is a 2.618 Fibonacci extension target at $460, as well as a potential target, for this leg of advance, at the significant $500 level.

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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.

Last modified: February 13, 2020 4:12 PM UTC

Venzen Khaosan @venzen

Market analyst and Open source developer with a keen interest in blockchain technology, consensus mechanisms and the decentralizing effect. He has found a solution to the PKI mechanism. Email me to discuss.

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