Bitcoin Trading Back To The Mean

Journalist:
May 16, 2016

Bitcoin trading returned price to a sideways path after a short upside burst failed to achieve altitude and fizzled back toward $455.

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Bitcoin Trading and Price Analysis

Time of analysis: 14h00 UTC

OKCoin 3Month Futures 1-Hour Candle Chart

From the analysis pages of xbt.social, earlier today:

The market passed the opportunity to advance in bullish chart conditions yesterday, and instead snapped back to the security of the 200-hour moving average (red).

Three weeks after its repeat high at $470 (Bitstamp) resistance the market has made neither a new high or low. The implication is consolidation into the contracting wedge formed by rising support (grey) and overhead resistance (light red zone above price).

With no clear indications as to the direction that the market will eventually choose to break out of the consolidation area, the prudent course of action is to wait for price to establish either above $470 resistance or below rising support.

As discussed during last week’s analysis, there is a risk of price falling to support at $400 or even nearer $300 prior to commencement of a steady rally.

If the market can buy price above $470 then it would have surmounted 6-month long resistance, yet, then, a need for symmetry in the chart could force a large correction from $500.

Summary

That bitcoin price will rally in the coming months is not a “maybe”, but to ensure a steady ride to the top it would be good to see price advance from a strong base, rather than the precarious no-new-high strain of the past four months. Let’s remind ourselves that advance is characterized by price making a series of higher lows and higher highs.

Bitfinex Depth Chart and Buy/Sell Volume

Click here for the CCN.LA interactive bitcoin-price chart.

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Disclaimer

The writer trades Bitcoin. Trade and Investment is risky. CCN.LA accepts no liability for losses incurred as a result of anything written in this Bitcoin price analysis report.

Bitcoin price charts from TradingView.
Image from Shutterstock.

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.