Bitcoin Price Bounces Off Long-Term Support

January 5, 2015 18:28 UTC

Bitcoin Price has risen to long-term support from Sunday’s lows in what appears to be an impulsive wave structure. There is no conclusive evidence that advance has begun and the trading survivalist’s best tactic at this time is to be patiently safe rather than sorry and out-of-pocket.

Bitcoin Price Analysis


Time of analysis: 13h00 UTC

Bitstamp 15-Minute Chart

The 15-minute Bitstamp chart shows the past week’s price action in detail. Yesterday (Sunday) price had dropped through long-term support (solid red trendline) and crisscrossed the level of the April 2013 high at $261. Today’s Asian session trade pushed price back above the long-term support where it’s currently bumping up against two Fib fan lines and approaching the 200-period moving average (thin red line).

The structure of the waves that pushed up from yesterday’s low appear to be impulsive and the entire structure consists of five clear waves. We cannot confidently call this an advancing impulse wave until we see another four sets of waves complete a larger degree impulse wave. For now we assume the structure is corrective and look for other signs of advancing price action, such as price advancing above both the 20MA and 200MA on the hourly and 4-hourly charts.

BTC-China 4-Hour Chart

The 4-hourly BTC-China chart show price action since September 2014 and shows that price is currently trading just atop the rising long-term support line at the lower-right of the chart. Notice that the 20MA (green) and 200MA (red) are still far above price, and we have some time to go before confirmation of advance is secured. For this, we have to wait, and any trades opened at current levels should be conservatively sized with a stop-loss at maximum 1,575 CNY ($255 Bitstamp).

Summary

Bitcoin Price has reversed upwards from a significant long-term supporting trendline.

Although we have a favorable chart set-up for advance from the present juncture, we have no confirmation that the decline is complete. We await several confirmations of advance: trade above the 200MA, a complete set of 5 waves showing impulsive wave action, as well as, the RSI and MACD indicator signals that accompany advancing price.

Avoid opening positions just yet – price must retest the lows in wave 2 before the profitable 3rd wave of advance launches upward. Failure to hold above the lows will open up additional decline. Hence, caution is advised. Don’t jump the gun.

CCN hosts an interactive Bitcoin price chart and market metrics such as this BitFinex Buy/Sell volume indicator:

Click here for the CCN interactive price chart.

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Readers can follow Bitcoin price analysis updates every day on CCN.

Disclaimer

The writer trades Bitcoin. Trade and Investment is risky. CCN accepts no liability 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: July 12, 2015 12:15 UTC

@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.