The bitcoin price chart has regained some lost ground, yet the long-term chart shows the next rally has not been signaled, even as $1,750 swirls in the tea leaves.
Time of analysis: 14h00 UTC
From the analysis pages of xbt.social, earlier today:
Yesterday was an historic day not only for the UK, with the British people sacrificing the pound (dropping to its lowest level in decades) in defiance of the banksters and the oligarchy, but also a historic day for Bitcoin as SegWit was merged in the Core code repository. SegWit remains in developer testing and will be officially released – for wider testing – in an upcoming release candidate. Major benefits include lower protocol network traffic, less block space consumption, and the elimination of malleability. The outcome is that the Core code will run more efficiently and consume less computing resources (such as CPU and storage), thereby, allowing more users to run their own full validation nodes. The world’s largest super-computer, the best of modern coding plus decentralization and security gains.
There are currently no clear buy or sell signals in the chart and we stick with the longer timeframe 1-day candle chart.
Fibonacci extensions drawn from the initial advancing wave, of January 2015, show significant price levels at 1.618, 2.618 and, recently, 3.618 (purple arrow). Hence, the advance had targeted a level in the vicinity of a Fib extension defined 17 months ago, and last week’s correction had hit both a 0.618 Fib retracement of the advance (discussed in yesterday’s post), as well as the 2.618 Fib extension of the initial 2015 wave from the decline bottom. These Fib extensions should continue exerting an influence (at 4.618, 5.618, etc not shown) as the advance proceeds.
Speaking of advance, traders are reminded of the indicator conditions that typically manifest at the start of a significant wave of advance. As pointed out earlier in the week, magenta circles highlight the state of the grouped stochastics at the start of advance. This particular oscillator was devised and coded by myself, and is shown at xbt.social, yet CCN readers can see the same behavior in an ordinary MACD indicator (top): price tends to launch into a large advance only when MACD has returned to its zero line, or (following strong decline) after tagging its lower Bollinger Band.
The current state of the indicators imply that the present upside wave is a correction – a B-wave – and not the start of a rally to new highs.
The uppermost trendline of the Fibonacci fan drawn from the vicinity of the 2015 low, is currently at $1,750 straight up. Definitely something to look forward to in the coming months – preserve trading account funds by patiently waiting for that rally to be signaled.
Bitcoin price is losing momentum below $700 and the longer term chart’s indicators imply ongoing correction. A new low cannot be ruled out, but let’s hope for a consolidation above the 2.618 Fib level (red arrow at $560 Bitstamp) discussed above. If buyers find new vigor at current levels, then the correction could still push to $750 before resuming decline. Without clear signals it is better to observe until an obvious opportunity shows itself – and confirmed by the indicators.
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Bitcoin price charts from TradingView.
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Last modified (UTC): June 26, 2016 05:26