Bitcoin trading is prolonging the sideways price path despite several opportunities, during the past few days, to break out of the consolidation into either advance or decline. What is the market waiting for?
Time of analysis: 14h00 UTC
From the analysis pages of xbt.social, earlier today:
Bitcoin price fell through both the reference Fib line and its 4-hour 200-period moving average, and still no definitive sell signal has formed in either the 1-hour or the 4-hour chart.
The price pattern resembles a base of advance, if viewed a certain way, but it also resembles a B wave teetering on the edge of a precipice – with an imminent sell signal threatening to implode price to the downside.
Because Segregated Witness has been widely applauded for inclusion in Bitcoin Core, and it offers the added benefit of allowing non-contentious blocksize increase, most traders may have forgotten about XT.
The present sideways “wait” is, arguably, stretching toward the XT implementation date on 11 January. The adoption of XT is unknown and the day presents some uncertainty. There is no doubt being expressed by core developers or most miners, but the general bitcoin public has been exposed to far more publicity about XT than SegWit. So when the XT vs Core rhetoric starts flying in the coming days we can expect some price moves and a trend direction to emerge when miners’ verdict is clear.
There is no particular technical indication about which way price will go, and both the price pattern and its moving averages are ambiguous. So, we can only wait for a clear signal – most likely on, or around the XT execution date, 11 January 2016.
Avoid the temptation to anticipate direction. Once price does enter a trending move there will be plenty of pips and profit.
Trading holds price in consolidation. Some uncertainty about the outcome of miners’ XT block vote may have the market in wait-and-see anticipation. Despite plenty of histrionics and blockchain opera from Gavin Andresen and Mike Hearn things did not fall apart when the blocksize capacity limit was hit – for several days in a row during November and December. Bitcoin is Bitcoin Core – Satoshi Nakamoto’s same original reference implementation – now able to raise blocksize with a scientific mechanism, and with minimum contention.
What do readers think? Please comment below.
Readers can follow Bitcoin price analysis updates every day on CCN.LA. A Global Economic Outlook report is published every Monday.
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.