Bitcoin Price Dive Only Snorkeling

October 24, 2014 07:59 UTC

Bitcoin price is completing an extended leg of correction and she’ll soon be returning to the surface. With most market instrument charts like Gold, equities and forex completing similar corrective moves, an explosive resumption of previous market trends is expected. The Fed is all out of chutzpah and stock market indexes are on the edge of a precipice. Bitcoin and Gold look set to advance strongly in the coming weeks.

Note: a new BitFinex Bitcoin price chart and trade metrics are now available via CCN.

Global Economy
Bitcoin Price Dive
Summary
Comments

Global Economy

Thought of the day from MarketWatch writer Michael Gayed:

I believe that the Last Great Bubble is bursting — faith in central banks to solve all problems.

Gold

The 4-hour Gold chart shows price above its 200-period moving average and also in a diverged state in relation to the indicators. Divergence is annotated in magenta and shows that price has made a higher low in comparison to the indicators that are showing a lower low for the same wave of price action.

Gold can, therefore, be expected to reverse back to the upside and resume its journey to $1,340.

S&P500

The S&P500 stock index is a pitiful sight. QE has devastated the finances – even the ability to pay for basic needs – of ordinary working US citizens. The equities markets are going to bear witness to the central bank idiocy of trying to print itself out of a financial crisis corner.

Double diverged, up against 200MA resistance, and now the domain of cynical short sellers; the S&P500 will soon be trading below that dotted blue trendline (lower-right of chart).

US Dollar

The US Dollar is disdained for being associated with the world’s previous superpower and its Wall Street government’s financial and foreign policy. However, the Dollar might yet prove to be the last fiat currency standing in a world where cash Dollars are the preferred means of settling trade. The US Dollar index (DXY) has resumed advance. It seems logical that Bitcoin should join the US Dollar in a reflationary rally.

Selected Economic Data

  • UK Prelim GDP q/q
    • weight 1
    • expected: 0.7% (previous: 0.9%)

[divider]CCN[/divider]

Bitcoin Price Dive

Time of analysis: 06h00 UTC

Asian Session

The Bitcoin price has hit the .50 Fibonacci retracement level across exchange charts.

Bitstamp Hourly Chart

The latest move down in wave e of wave 2 can complete at .5, .618 or the .89 retracement levels. Once the end of wave 2 is struck decisively, price will reverse strongly to the upside and commence advance in wave 3 which will see price move above $400 and eventually $500.

The first target for advance will be the $368 price which will now resist advance. Beyond that price will try to climb above the red 200-period moving average at $382.

Summary

Potential targets below are $330, $300 and $290. There is no telling where the last corrective wave will end, so it is recommended that buyers wait for price to reverse to the upside and then buy BTC as price establishes above the successive way-points listed below.

Alternatively, apportion your capital so as to allow buying batches at the targets mentioned above.

Once price reverses to the upside, the way-points for advance are $368, $382 and then $400.

Readers are welcome to share their thoughts and opinions. Please comment below.

[divider]CCN[/divider]

CCN hosts a summarized Economic Calendar showing the week’s main data releases.
The Bitcoin price chart and trade metrics are available.

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: July 12, 2015 10:58 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.