Bitcoin trading finds itself in crushing indecision, once again, as the looming macro-economic crisis confounds both bulls and bears. Its not so much about what the Fed will say on December 16, but about what exactly rising rates and a US dollar rally means for bitcoin. Or could this be the onset of the XT co-option blues?
Time of analysis: 14h15 UTC
From the analysis pages of xbt.social, earlier today:
The 1-hour chart reveals a severe case of corner-painting, as the bitcoin market indecisively trades itself into the uncomfortable end of a wedge.
There has been no new price high or low since the 15th of November and the indicators confirm the constricting momentum.
This kind of converging price pattern is usually seen when the market is uncertain about price direction – the bulls lack conviction and the bears prefer to play their short trades safe. Eventually, when the pressure cooker’s lid blows off, one side capitulates and the result is a breakout that travels the same distance as the widest part of the consolidative triangle – in this case, the height of the red rectangle – 250 CNY and $30 (Bitstamp).
Which way price will break to is anyone’s guess. In one way of looking, a break to the upside ($350) will make the chart seem unbalanced, but then again, the bitcoin chart always looks odd. Breaking $30 to the downside from current levels will put price at $290 (Bitstamp), which seems about right: the market will find itself back in the quicksand below $300 and, good sense prevailing, jump back above $300 as quickly as possible.
Like most markets, the bitcoin chart spends most of its time in either correction or consolidation. This leaves traders with only a few trade opportunities: once every few weeks or months. The current consolidation is setting up such an opportunity and the smart tactic is to wait for the breakout before making a bet on direction.
Bitfinex Depth Chart and Buy/Sell Volume:
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