Posted in: Archive
Published:
October 16, 2014 11:04 AM UTC

Bitcoin Price Rally Above $400

The Bitcoin Price is set to rally above $400 during Thursday's trading session after consolidating below it for two days. The outlook for Bitcoin is increasingly bullish as more and more evidence of a long-term advance manifests on the price chart. Lack of Liquidity Making…

The Bitcoin Price is set to rally above $400 during Thursday’s trading session after consolidating below it for two days. The outlook for Bitcoin is increasingly bullish as more and more evidence of a long-term advance manifests on the price chart.

Lack of Liquidity Making Headlines
Global Economy
Bitcoin Price Analysis
Summary
Comments

Lack of Liquidity Making Headlines

This was a pukage. People were putting in market order to sell on the open – ‘Just get me out’ – without thinking.
– Brian Stutland of Equity Armor Investments.

CNBC reports on the “unprecedented” lack of liquidity in markets as traders are trying to exit positions, held in tumbling equities, at all costs.

This column has been tracking the performance of the S&P500 index for several months, with the outlook that equities will come down – and come down hard. On Monday the IMF issued a public criticism of the banking sector and its institutionalized flaws of poor governance, excessive risk taking and credit mispricing. The IMF warns of illiquidity and “runs” – and won’t protect anyone’s back(side) during the fall-out – seemingly washing their hands of the irresponsible banksters.

An employee of Nanex told CNBC that there were 179 “mini flash crashes” during the first 15 minutes of trading on Wednesday. “There was no liquidity at all, so it doesn’t take a whole lot of size to really move the price,” he said.

Also read: IMF Implores Banks to Curb Excesses
Also read: IMF Says Banks Should Manage Public Perception
Also read: IMF Warns of Market Volatility, Risk of “Runs”
Also read: Fed’s Williams: We Can Do Even More Asset Purchases
Also read: Connecting in a Decentralized Economy
Also read: Bitcoin Won’t Meet Napster’s Fate

What do readers think? Please comment below.

Global Economy

Gold

Gold fell just short of hitting $1,250 during yesterday’s US session and is now consolidating to $1,240. The following 4-hour chart shows the context of the long-term $1,240 support and resistance level. Gold is currently above the 4-hour 200MA and making its way to the upper trendline (purple) in three waves.

S&P500

A longer-term view of the S&P500 chart. The daily chart shows that the S&P500 had dropped through a two-year support level down to the rising trendline that had acted as support two and three years ago. It offered a safety net now, but price is below the daily 200MA. The index might rise back to the 200MA; however, the next leg of decline will slice through it to the last support above $1000. Think of Wiley E Coyote dropping through the branches of a tree… a tree standing on the edge of a cliff.

US Dollar

The US Dollar has found support at the 4-hour 200MA. Accompanying divergence in MACD and RSI should see a reversal to the upside between $84.00 and $84.50.

Selected Economic Data

  • Canada Manufacturing Sales m/m
    • expected: -1.6% (previous: 2.05%)

  • US Unemployment Claims
    • expected: 286K (previous: 287K)

[divider]CCN[/divider]

Bitcoin Price Rally Above $400

Time of analysis: 04h45

Asian Session

The majority of Bitcoin exchange volume is comprised of Chinese Yuan. While the Bitstamp BTC/USD chart shows no significant volume variation from September to October, the BTC/CNY charts tell a different story. A look at volume in the long-term BTC-China chart shows the buying interest since last week’s low. (I’m also relieved to see that I wasn’t the only market participant who thought the August low was a potential reversal point.)

BTC-China Daily Chart

There is no specific analysis to present during the Asian session so far. Analysis from yesterday stands: uptrend, bullish, above $400, advance. There may be another pullback here to $373 at the center line of those 50-period Bollinger Bands on price. However, pushing above $400 and then $415 will confirm the next wave of advance.

Bitstamp 4-Hour Chart

Summary

As happens after the conclusion of a devastating downtrend, many market participants only catch on to the reality of advance at the start of the third wave to the upside. Bitcoin price is currently in wave 1. At the top of wave 1, price will go down in wave 2failure to make a new low below $275 will validate this count – and then price should thunder to the upside in wave 3.

As can be seen in the past 10 days’ price action, there is significant and prolonged selling at each wave correction, although the bulls inevitably push higher in the end. This is because traders are scared that price can reverse to the downside at any time – as has been the pattern of decline – and then prefer to play it (psychologically) safe by remaining preoccupied with selling.

The sensible thing to do during an uptrend is to buy on the corrections. Never short during a Bitcoin price rally and sell only to lock in profits – buying is your main objective until you see stupendous daily advance.

Price may still drop down to $373 today, although this analyst favors a low – if any – at $387 (Bitstamp). The Bitcoin price will be pushing above $400 to $460 and possibly $500 in rapid advancing moves – either this week or early next. Lock in profit at $460 and we’ll assess direction from there.

[divider]CCN[/divider]

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.

Disclaimer

The writer invests in and trades 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 aradaphotography and Shutterstock.

Last modified: February 13, 2020 4:37 PM UTC

Venzen Khaosan @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.

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