Bitcoin Price traded sideways-to-up during the US session with today’s Asian session pulling price down to the low $320s. Today has a full moon, and its influence will show us the stage of trend development in the Bitcoin price wave cycle.
Bitcoin Price Analysis
Time of analysis: 17h43 UTC
Price pushed through the trendline and hit $354 on the Bitstamp chart. Currently trade is returning to test the trendline. The 4-hour 20-period moving average (20MA) is now some distance below price action at $326. Upside targets remain $365, $375 and $390 – where reversal should occur at the 1.618 Fib extension for this wave up.
FOMC Meeting Minutes at 18h00 UTC
Bitstamp 15-Minute Chart:
Time of analysis: 08h38 UTC
Trade surged above resistance at $336 and has met a declining trendline that capped recent weeks’ decline. Getting above this trendline will open up advance to horizontal resistance at $365 and then the 1.618 Fib extension at $390. Dropping away from the trendline, the 4-hour 20MA should step up as resistance – if it fails… be prepared for downside action.
Bitstamp Hourly Chart:
Time of analysis: 03h00 UTC
Midway through the Asian trading session the 4-hour Bitstamp chart shows price holding above the 20-period moving average (20MA) which implies continued advance.
Updates will added at the top of the article as significant price action becomes evident in the chart.
Bitcoin Price and the Moon
It’s difficult to determine a cyclical effect of Moon phases on the market. What is clear from the chart below is that significant market highs and lows coincide with Full and New moons. Market esoterica such as “Sell on the New Moon, Buy when it’s Full” seem to have a statistical chance of getting traders and investors in and out of the market at reversal points. However, as seen in the Bitcoin price chart the maxim does not hold true in all cases.
In the chart below, where a significant high or low coincides with a New moon, it is indicated with a magenta arrow. Significant highs and lows that coincide with a Full moon are indicated with yellow arrows. As you can see it’s a mixed bag, with both highs and lows falling on either – although there is a higher incidence of annual market highs being hit at New Moon (yellow up-arrows).
Moon Phase Chart
Click on the chart for a larger image.
Our concern today is not with market highs but lows. The Bitcoin price hit a decline low (three days ago) during the final days of the waxing moon. Today, 8 October 2014, is Full moon. Reviewing the chart, above, there are three occurrences of significant lows being hit during the days adjacent to a Full Moon.
If Sunday’s low was indeed the decline bottom, then we can expect price to confirm the uptrend by holding above the 20MA and targeting the 200MA (near $400) on the 4-hour Bitstamp chart. A sensible stop-loss for this long position can be placed between $275 and $300.
Sunday’s analysis highlighted the fact that unfilled decline targets still wait near $260 and $200. If price were to drop away below $300 and resume decline, then $260 will be primary and $200 a secondary target for decline.
Harvest moons are highlighted in pale orange. On the Bitcoin price chart, they occur in conjunction with both market highs and lows. Notice that price extremes on the chart are accompanied by Harvest moons: in November 2011 and November 2013. The next Full moon, on 7 November, will be a Harvest moon.
Statistically, next month’s Harvest moon should accompany a price extreme or significant market reversal. Which will it be – a high or a low? Either the Bitcoin price rallies for the next 30 days to a new high or a new low is waiting to capitulate following the current price rise. This is why the return to decline is discussed above, as a warning to traders and investors not to over-commit to the upside until the uptrend is confirmed.
Today sees the release of the Federal Open Market Committee (FOMC) meeting minutes and with it the revelation of whether QE tapering is final and that interest rates will be going up. The market will eagerly anticipate the news and the actual release should see some strong market moves. The reaction of the Bitcoin price will be interesting.
Selected Economic Data
- US FOMC Meeting Minutes
- weight 2
CCN hosts a summarized Economic Calendar showing the week’s main data releases.
Readers can follow Bitcoin price analysis updates each weekday on CCN. In-depth analysis articles are published every Sunday.
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.