Bitcoin value (price) is back above $240 (Bitfinex) / 1525 CNY (BTC-China) and completing what looks to be an ending diagonal in the 5-minute chart. Our expectation for a resumption of decline is now stretched to its outer limit and xbt.social analyzes the chart for options.
From the analysis pages of xbt.social, earlier today:
The 4-hour Bitstamp chart above has some basic support and resistance levels in light blue, as well as channel trendlines defining the past three months’ price action.
The channels are not definitive – more can be drawn – but those shown in the chart seem to fit the price waves adequately.
The magenta channel shows the apparent boundaries of the current set of declining waves. They only contain the latter set of waves since no adequate fit can be found that also includes the initial two waves down from $300. This implies that the first two waves are wave A and wave B and that the latter waves belong to a five-subwave structure, namely wave C, that appears incomplete because it had not made a final touch of the lower magenta channel line.
With an MA sell signal forming in the 1-day chart we would expect price to decline to the magenta line anywhere between $230 and $210.
We have to ask the question whether the yellow trendline may not have fore-shortened, or “truncated” the last wave down. Although not visible in this chart, closer inspection, in the 15-minute chart, of the last wave to $236 shows that it can be counted as five waves. Not definitively, but approximately. Notice how, in early February, some corrective waves had failed to decline to new lows as a result of buying interest at the $210 support floor. Could this same dynamic be operating in the present wave?
If the wave from $300 is complete then advance has begun today and price will advance above the upper magenta channel line soon. If the declining structure is incomplete then the upper magenta channel line should contain price action which should fall away to the lower magenta channel line with some energy.
Those are the main two scenarios we are looking at. Decline should begin now, if our trade is to turn a profit. Despite our $210 target, traders can choose to take profit at the lower magenta trendline, or else, wait for a price candle to push above the Tade Recommendation’s designated moving average to manually close your position.
The Bitcoin price chart had been erratic and unpredictable during March. At month-end the chart remains ambiguous but its next move will be determined by price action in the coming hours: If the wave to the upside completes soon it will close an ABC from today’s low, after which decline should resume. Continuing higher toward the 200MA (in the 1-hour chart) will bias the wave pattern to advance.
The Bitfinex Buy/Sell Volume indicators shows the indecision that has characterized price action between punctuated declines during March.
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.
Last modified (UTC): July 12, 2015 14:57