January 8, 2015 9:59 PM

Bitcoin Trading Pushes Bitcoin Price Under $300

Bitcoin trading pushed the Bitcoin Price above our upper channel trendline and, today, declined during the Asian and European sessions from $303 to $282 (BitFinex) and slight recovery since. The market must now show us what it intends to do as trade has halted decline on a lower channel trendline.

Bitcoin Price Analysis

Time of analysis: 15h00 UTC

BTC-China 1-Hour Bitcoin Trading Chart

The BTC-China hourly chart shows today’s decline across the magenta channel lines we introduced in yesterday’s analysis. Bitcoin price had targeted a pivot level at the upper channel trendline. The BTC-China chart turned just below the pivot (1,805 CNY), and the BitFinex chart exceeded the pivot ($298) to a high of $303.

An orange arrow shows that the BTC-China high also corresponded to a 1.618 Fibonacci extension of the first wave up from Sunday’s low (drawn at left of the chart). Bitcoin price tends to favor .618 Fib ratios when trending (up or down).

The low struck earlier today corresponds to the level of the first wave’s high near 1,710 CNY. The BitFinex chart declined to within $2 of this first wave high at $280.44. The reason for comparing today’s low to the first wave low is that there may be a clue regarding wave count and price action going forward. In Elliott Wave Principle, the first wave and fourth wave may ordinarily not overlap each other’s price territory. BitFinex meets this criterion, but BTC-China, given its slight overlap, is borderline.

The adherence of price action to a channel with parallel upper and lower trendlines implies that we may see another wave, namely wave 5, of advance. If advance recommences, price will aim for the upper channel trendline again. This will also serve as one of our confirmation that a larger uptrend is in progress.

“Adherence” to the channel means that price must get above the lower channel trendline and establish trade above the green 20MA and blue 50MA. Until it does, we have no certainty of price direction.

Bitcoin Trading Summary

If price fails to make a new high and drops out of the magenta channel to lower lows then the advance of the past few days had simply been a correction in the longer-term decline. In case of the latter, we would expect the decline to resume to $200.

However, there is no confirmation that this is about to happen. On the contrary, if price can get back inside the channel and above (at least) the 20MA in the 15-min and hourly charts then we have continuing bullish bias.

CCN hosts an interactive Bitcoin price chart and market metrics such as this BitFinex Buy/Sell volume indicator:

Despite the decline BitFinex’s 24hr Buy/Sell Volume remains almost even. The hourly volume reflects heavy buying after today’s decline low.

Click here for the CCN interactive price chart.

What do readers think? Please comment below.


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

Bitcoin price charts from TradingView.
Images 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.