Bitcoin Price Needs You

September 23, 2014 09:49 UTC

The Bitcoin price is in a holding pattern awaiting a directional watershed. Last Friday price bounced off a rising trendline, originating at a price low set in 2012, and is now approaching it, once again, as trade meanders sideways. The side of the trendline that the market chooses could set the direction of trend for the coming weeks.

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Update 17h50 UTC

The market has decided. A few minutes ago, the Bitcoin price touched the rising trendline and launched into a strong advancing wave. Not sure that the trendline can take all the credit, though – keep your CCN home page refreshed for a surprise Bitcoin adoption breaking story. It is not this analyst’s usual assumption to make trade recommendations, but it is most definitely time to buy Bitcoin.

Bitstamp 15-Minute Chart

$460 remains the upside target, followed by Fib extension 2.618 (not shown) at $512:

Longer-Term Fibonacci Ratios 06h00 UTC

Fibonacci ratios pervade the Bitcoin price chart and, in fact, every market chart. If one starts looking for such ratios, they present themselves. For this reason it can be misleading to place too much trust in an arbitrary correlation, and to use it as a predictive indicator in it’s own right. The following study is an example:

The internal wave ratios of each of the two wedges is uncanny. Notice how the Bitcoin price’s favorite .618 Fib ratio serves as a reaction zone (in time) within both wedges. Yet, until a wave structure is complete, it would be too hasty to extrapolate targets from the Fib tool drawn over the current decline.

What is more interesting in this chart is the Fibonacci time relationship between the first (larger) wave of advance and the second (current) wave. The time demarcations are shown as numbered horizontal lines starting from the price low in July 2013 and measured to the all time high. This particular projection has a Fibonacci value of 3 at the low struck last Friday. A similar projection starts from the April 2014 low and measures to the June high. Its Fib 3 extension also falls on this past Friday’s low. The intersection of the two time projections is indicated by the dashed red vertical line.

Is this a reversal point in time? Is it the recent decline’s low? Is it an intermediate price level before continuation to lower lows?

Price will, during today’s trade, touch the rising trendline that has supported it since that low. We don’t have to wait long to find out what the Bitoin price has in store for us.

Summary

Neutral indicators and a contracting wedge provides price with two options. The New Moon may draw price action higher now, or the channel trendline near $200 may pull price lower first. Until the market decides, it’s best to stay out.

Economic Data and Announcements

Tuesday 23 September

01h45 China HSBC Flash Manufacturing PMI
expected: 50.0 (previous: 50.2)
07h00 France Flash Manufacturing PMI
expected: 47.1 (previous: 46.9)
07h30 Germany Flash Manufacturing PMI
expected: 51.3 (previous: 51.4)
12h30 Canada Core Retail Sales (monthly)
expected: -0.1% (previous: 1.5%)

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CCN hosts a summarized Economic Calendar showing the week’s main data releases.

Updates to this article will be made during the European and US trading sessions should any significant events come to light.

Ongoing discussion in the CCN Traders group. View our Bitcoin Price Chart here.

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.

Images from Shutterstock.

Last modified: July 12, 2015 10:51 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.