Bitcoin price had fallen to new lows accompanied by indicator divergence and we now see the consolidation below support that allows us to build a short position.
Time of analysis: 15h00 UTC
From the analysis pages of xbt.social, earlier today:
We have the condition described in yesterday’s analysis: price has made a new low accompanied by indicator divergence and the price pattern resembles the area we used for comparison yesterday. In that pattern price pushed higher until 1-hour MACD reached its zero line.
The current MA alignment is a massive sell signal. The 800MA (purple) has been added to the chart to show its magnitude. A similar instance of the same signal can be seen on the left of the chart.
We now stand ready to open a short position. Price should push higher – in a correction – perhaps as far as the red 200MA. Reaching the 200MA is less likely, given the strong downward momentum and the likelihood that most market participants are now bearish following the strained failure to make upside progress.
The orderbook balance that we saw during the previous decline is evident once again: Bitfinex has a mass of buy orders just below price while Bitstamp has more orders just above price (see depth chart below). Bitstamp has consistently been kept below key levels and it seems that one or more of the larger players are throwing their weight around in that exchange and massaging the market into decline.
Since we already have an MA sell signal in the 1-hour chart, we will use MACD as our key indicator for entry. Once price reaches the 1-hour MACD zero line we will begin building a position. A Sell Trade Recommendation will be published at xbt.social later today.
Be aggressive in a trending market and conservative in a choppy market. – Vadym Graifer
Bitcoin price, like all commodities, is in the clutches of the Bear. Market participants are selling – not only based on uncertainty or the desire to short sell the market – but in many instances because of a shift to conservation and the psychological need to fall back to cash.
Bitstamp orderbook depth and Buy/Sell Volume:
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Bitcoin price charts from TradingView.
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Last modified: September 16, 2015 22:46 UTC