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.
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).
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.
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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.
Last modified: July 12, 2015 12:15 UTC