Bitcoin price has made a double in the BTC/CNY exchange charts and we might see a trend reversal today. However, the USD exchange charts do not confirm the double top pattern and we examine the confirmation signals for trade.
Bitcoin Price Analysis
Time of analysis: 15h05 UTC
OKCoin-CNY 15-Minute Chart
From the analysis pages of xbt.social, earlier today:
A partial outcome for our expectations but we still do not have sufficient price action to determine whether trend will continue higher or if it has now reversed.
The CNY charts printed a double top but Bitstamp, Bitfinex and the OKCoin USD charts show a new high today. Meanwhile, BTC-e is not following the other exchanges down and is still holding its level above $270. So a mixed picture in the charts.
The current declining wave can be attributed to a Head-and-Shoulders (H&S) pattern formed at the top (blue annotation shows the neckline). The CNY charts' double top, formed to the high of the 17th, implies a correction down to 1600 CNY and $250, but the double top is not convincing in all the charts, so there is insufficient reason to trade short at the moment. A potential sell signal is forming in the 15-minute chart, and this may be an initial clue which way trend is currently pointing.
Remember the clever speculator is always patient and has a reserve of cash. - Jesse Livermore
We want to see what the market does next. Price has paused decline after completing the H&S pattern and may now push higher again. How high and in how many waves will give us clues of trend continuation to the upside. We can only, reasonably, open buy positions if price advances to a new high (thereby invalidating the double top) and if it does so in impulsive (5-wave) price action. If price does not push to a new high and continues decline below the 1-hour 200MA, then likely targets are $250 and 1600 CNY.
Bitfinex orderbook depth and Buy/Sell Volume:
What do readers think? Please comment below.
Readers can follow Bitcoin price analysis updates every day on CCN.LA. A Global Economic Outlook report is published every Monday.
The writer trades Bitcoin. Trade and Investment is risky. CCN.LA accepts no liability for losses incurred as a result of anything written in this Bitcoin price analysis report.
Bitcoin price charts from TradingView.
Image from Shutterstock.