Bitcoin price was massaged lower in the week leading up to the Fed rates hike announcement, and then eagerly traded up on the day. The chart technicals implied a bull trap and the sound of a can being kicked was its closing bell.
Time of analysis: 15h23 UTC
From the analysis pages of xbt.social, earlier today:
The Fed has declined their new unregulated shadow bank clients the lucrative opportunity of a rates hike. Its not a matter of if but when – and it was not yesterday. The bitcoin market got its knickers in a knot by trading price upward in anticipation of the announcement (as had been the game with Greece during July and August). Today we see the fallout and the large speculators must now sit on their cheaper bitcoins or sell them.
Yesterday’s assessment that the move higher was a corrective triangle has to be revised.
An Elliott Wave “triangle” can have an exaggerated final wave, but the push higher, prior to the Fed announcement, was clearly impulsive. The price action prior to the upward curve of the impulse may be its subwaves i, ii and iii; or it may be a preceding zigzag.
The entire structure from Wednesday’s low to the 200MA could therefore be interpreted as either as a single five wave impulse (with an extended 5th wave) or as an ABC zigzag. In the case of the former (an impulse) the upward correction would be complete. In the case of the latter (a zigzag) we could still expect two additional corrective wave prior to resumption of decline.
For a more cautious approach we assume that we do, in fact, have a zigzag in this “c” wave position, and according to Elliott Wave Principle we would then expect an additional two waves of correction: waves “d” and “e”.
The target of wave “d” is labeled at the lower channel trendline and wave “e” (not labeled) would return price to the upper grey trendline. Decline would then resume to below $220.
Should price decline below the lower trendline, today or tomorrow, that would be a confirmation that immediate decline to lower in the chart is underway.
Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected. – George Soros
Price appears to be heading for the sub-$220 target and may reach it within the coming days. As outlined above there is a possibility that the market may extend the rally and try to retest the 15-minute chart 800MA (purple) again. Dropping below the trendline near $230 will invalidate this view and shift our expectation to immediate decline.
Bitfinex orderbook depth and Buy/Sell Volume:
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Last modified: September 22, 2015 23:14 UTC