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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.
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.
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).
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.
Time of analysis: 06h00 UTC
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.
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.
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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.
Last modified: July 12, 2015 10:58 UTC