Bitcoin Price Analysis: BTC Pushes All-time Highs and Tests Historic Resistance

Bitcoin Price Analysis

Throughout the life of bitcoin’s two-year bull run, it has been confined within two macro trends: one parabolic and one linear — both on a logarithmic scale:

Figure_1.JPGFigure 1: BTC-USD, 1-Day Candles, Macro Trend

The parabolic envelope (black curves) has confined the entire bull run throughout the last two years. Over the weekend, we saw a test of the lower curve that proved to be proper support and propelled the market into a bounce that now has the market testing the upper linear trendline (purple lines) at the time of this article:
Figure_2.JPGFigure 2: BTC-USD, 2-Hour Candles, Test of Upper Trendline

As the bitcoin market approaches the upper trendline, the price action will coincide with a test of the previous all-time high. Expect this to be a point of resistance with possible market turbulence. However, if we manage to break that resistance level and hold support above the trendline, there is no clear resistance until we test the parabolic envelope in the upper $8,000s.

If we look at the macro indicators for this move, we see some signs that have proven to be indications of short-term rallies leading to corrections:

Figure_3.JPGFigure 3: BTC-USD, 1-Day Candles, Bollinger Band Trend

The last two corrections bitcoin has seen came on the tail of a minor pullback that rebounded to a new all-time high. The one-day candle trend is, so far, showing a repeated pattern that has led into a reversal each time it tested the upper parabolic curve. A rounding of the Bollinger bands during an upward move (shown in purple) is a forecast for decreased upward volatility that will lead to either a consolidation period or a reversal to the lower Bollinger bands.

While a reversal is not required of this move upward, one can speculate that once the price tags the upper parabolic curve, we could see a pullback to the lower Bollinger bands on the one-day charts. A pullback to the lower Bollinger bands would see support quite nicely with the lower parabolic curve.

One of two outcomes can be expected from this move upward: either we will test the upper parabolic trendline and reverse, or we will break above and consolidate before continuing on a very strong bullish move to new highs.

However, these macro moves have become increasingly more demanding on the market as we continue to get squeezed within the parabolic envelope. The forecast of the Bollinger bands indicates we are not likely to see a sustained move higher without a consolidation period or a pullback.

Summary:

  1. Over the weekend, bitcoin saw another test of the lower parabolic curve that proved to be strong support.

  2. After testing the parabolic curve, the market rebounded and has now established a new all-time high.

  3. If this trend continues, bitcoin could see prices in the mid to upper $8,000s before any noticeable resistance stands in the way of the price growth.

Trading and investing in digital assets like bitcoin and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.

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Bitcoin Price Analysis: Market Correction Could See Lows of $5,800

Bitcoin Price Analysis

In our last discussion of the bitcoin market, an emphasis was placed on the $7,000 support level because it represented a historic point of interest and it showed strong signs of support — a break of which would ultimately prove to have a strong downward move following afterward.

Bitcoin has since broken the $7,000 support level. It then took an immediate $500–$600 move downward and has, thus far, shown little interest in bouncing upward. Taking the whole move into view, we can see quite clearly that we completed a Wyckoff Distribution phase on the 30-minute candle; we are now heading downward as the supply is overwhelming the market:

Figure_1 (19).JPGFigure 1: BTC-USD, 30-Minute Candles, Wyckoff Distribution

Figure 1 shows a breakdown of the $7,000 support level, ultimately timed with the Last Point of Supply (LPSY) for this distribution phase. The LPSY represents the final, overwhelming abundance of supply in the market. As the price pushes lower, the supply outweighs the demand in the market and, as we are seeing in the current market, there is very little desire to buy at these prices.

Figure_2 (16).JPGFigure 2: BTC-USD, 1-Day Candles, Macro Parabolic Trend

Figure 2 shows the rejection of the linear ascending resistance line (shown in pink). This trendline has historically proven to be a point of reversal and, at the time of the article, is rejecting the trendline for the fourth time. If we follow the correction trend, we can expect an ultimate test of the lower parabolic curve that has proven to be support over the course of the last two years.

Figure_3 (15).JPGFigure 3: BTC-USD, 2-Hour Candles, Fibonacci Retracement Set

As predicted in the previous bitcoin analysis, we are currently finding support along the 23% Fibonacci Retracement values in the lower $6,500s. Historically, these values haven’t proven to be a significant market value, so I would not at all be surprised to see a test of the 38% values sometime soon. Figure 3 shows a lot of market activity and a well-established baseline of support in the 38% values. If the 23% values break and don’t hold support, we can definitely expect strong support in the 38% values that will require multiple tests if it tries to break the 38% support.

Summary:

  1. Bitcoin broke below the $7,000 support level and ultimately completed a Wyckoff Distribution phase.

  2. Prior to the breakdown in price, the market rejected the historic resistance line, which has signaled a strong reversal point throughout the market’s history.

  3. We are currently finding support on the 23% retracement values, but ultimately the stronger support will be found on the 38% values in the $5,800s.

Trading and investing in digital assets like bitcoin and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.

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Bitcoin Price Analysis: Bitcoin’s All-Time High Tests a Historic Reversal Point

Bitcoin Price Analysis

For months on end, BTC-USD had a strong bullish rally that has been well confined between both a linear ascending channel and (on a macro scale) a parabolic curve:

Figure_1 (18).JPGFigure 1: BTC-USD, 1-Day Candles, Linear and Parabolic Trendlines

After a very strong, bullish rally, bitcoin managed to settle on a new all-time high in the $7,500s. This price peak bounced right off the upper linear ascending trendline shown in Figure 1. Historically, every time bitcoin has touched the upper ascending trendline, the market has gone through a corrective phase and entered into a relatively strong bearish reversal. At the time of this article, bitcoin is currently testing key, macro support of the lower $7,000 price range:

Figure_2 (15).JPGFigure 2: BTC-USD, 1-Hour Candles, Macro Support

The 23% Fibonacci support has been a point of interest in the market’s history and will prove to be strong support. BTC-USD has attempted to break this support level a couple of times already and we are currently making a third test. A break below this level of support could send the price down to the 38% retracement values and test the $6,700 prices. However, if we look at the previous price action (the red circle) that brought the price upward, we don’t see any consolidation or support in the market’s history. This tells us that the 38% price level most likely won’t prove to be significant support during a potential move downward and we can expect to find stronger support in lower values around the $6,400–$6,500 prices.

Historically, during correction periods, bitcoin has retraced 50–61% of the initial bull run:

Figure_3 (14).JPGFigure 3: BTC-USD, 12-Hour Candles, Retracement Trend

The 50–61% retracement trend has formed a very nice, consistent ascending trendline for the lower support values. Unfortunately in this case, a retracement to the lower trendline would shove us outside the parabolic envelope described in the last bitcoin market analysis. On a macro level, if we do continue on a macro retracement to the 50–61% retracement values, we will likely find support on the lower parabolic curve in the $5,300s.

Overall, bitcoin appears to be experiencing a slow bleed and will likely continue until some buying pressure picks up on the market. In general, the bullish pressure is somewhat exhausted, and if there is a resumption of an uptrend, we will likely see support and bullish continuation off the 23% retracement and $6,500 values outlined in Figure 3.

Right now, bitcoin is in a precarious situation because it’s sitting just above support at the $7,000 level and doesn’t appear to have any interest in climbing back up just yet. Keep an eye on this support level and watch for a rise in volume on the next test of support. If we break this support level, it’s likely to continue downward for several hundred dollars before finding support once again.

Summary:

  1. Bitcoin topped out its all-time high at the upper boundary of a macro, linear trendline.

  2. Historically, a test of this trendline has prompted a market correction — it is likely that this trend will continue.

  3. We are testing key support at the $7,000 price level and a move below this support will signal a continuation of the down trend.

Trading and investing in digital assets like bitcoin and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.

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Bitcoin Price Analysis: Bitcoin’s Parabolic Envelope Could Push to $8000s

Bitcoin Price Analysis

Bitcoin has had a quite a year thus far, to say the least. A 10x return since the beginning of the year has put bitcoin on a parabolic growth path that is testing the limits of this 2-year long bull market:

Figure_1 (17).JPGFigure 1: BTC-USD, 3-Day Candles, Parabolic Growth Envelope

The gains have been incredible for those trading bitcoin for the last couple years, and it appears that this parabolic envelope is coming to a close. In order for this bull market to remain viable, it will need to keep up on a very aggressive, parabolic growth path that has the immediate upper resistance at between $8,000 – $9,000. Similarly, the lower support is around $5,800.

A break of either the support or resistance will put bitcoin in a very precarious position. If bitcoin breaks the upper, parabolic resistance trend and manages to find support on the trendline, this could signal an entirely new bull market. However, if bitcoin breaks the lower support, this would send a very, very bearish signal to traders, indicating a breakdown of the 2-year long bull market.

Given the trend we have seen over the last two years, it would not be at all surprising to see a test of the $8,000s before any sort of market correction (micro or macro) takes place. We are on a very aggressive growth path and, on a macro-scale, one that has has shown a consistent trend of testing the upper curve prior to correction.

This is a very strong bull market and it it should not be underestimated. However, in an effort to remain objective, it’s important to present the not-so-obvious argument and state the consequences of a disruption of this macro bull market.

Figure_2 (14).JPGFigure 2: BTC-USD, 1-Day candles, Retests of Previous All-time Highs

Throughout the life of this parabolic run, bitcoin has shown a penchant for retests during market pullbacks. We can see in the image above that every time the market peaks the upper resistance curve, it has pulled back to retest the previous all-time high before the resumption of uptrend. Part of the consequences of this parabolic growth is we are at a point where the growth is so aggressive that a retest of the previous all-time high would throw the market trend well outside the parabolic envelope. And, as stated above, that would send a very strong macro bearish signal to traders and investors as this marks a breakdown of the 2-year long trend.

Summary:

  1. The parabolic trend bitcoin has seen over the last two years is approaching a very aggressive level that could make bitcoin see aggressive price swings in the coming weeks.

  2. The upper boundary of the parabolic curve could have bitcoin testing the $8,000s.

  3. A break below the lower curve could spark a macro bear market as this signals the breakdown of the bull market’s multi-year trend.

Trading and investing in digital assets like bitcoin and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.

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Bitcoin Price Analysis: Signs of Divergence May Point to Potential Distribution Phase

Bitcoin Price Analysis

After bouncing back and forth from $5100 to $6100, BTC-USD managed to squeeze out one more (albeit short-lived) all-time high. This article is going to present an update to the last discussion regarding the potential Wyckoff Distribution and provide a more contextualized, macro-view of the current bitcoin market. Before reading any further, I would like to emphasize the word “potential” within the context of this discussion because until the market actually reverses, this is nothing more than a potential market set-up:

Figure_1 (16).JPGFigure 1: BTC-USD, 1-HR Candles, Potential Wyckoff Distribution

When we last discussed this potential distribution pattern, we hadn’t experienced the first Upthrust (UT) or the following Upthrust After Distribution (UTAD). Both Upthrusts represent a brute-force market test of the bitcoin demand and, as you can see, the Upthrusts were very short-lived and ultimately pulled back to more comfortable price levels.

At the time of this article, we are potentially in what is known as “Phase C” of the Wyckoff distribution. Phase C is meant to intentionally deceive the bullish retail traders into buying and to shake out unconfident shorters. The whole purpose of Phase C is to create the illusion that market wishes to push upward and resume the uptrend while the larger market players unload their liquidity onto the more bullish investors. In the Wyckoff distribution model, the UTAD is the terminal shakeout opportunity and serves to test the remaining market demand before a larger correction follows.

During yesterday’s potential UTAD, one of the top contract holders on OKCoin got liquidated for a 480,000 contract position — or, in other words: $48 MILLION dollars. Yesterday’s liquidation was the largest liquidation in OKCoin history. So, if you feel as if you can’t quite get a grasp on the market and you keep getting stopped out of your positions, just know you aren’t the only one. All of this misdirection is part of Phase C within the Wyckoff distribution model.

Figure_2 (13).JPGFigure 2: BTC-USD, 12-Hour Candles, MACD and RSI Divergence

On a more macro-view, we see clear signs of bearish divergence on both the RSI and MACD indicators. This gives us an indication that the market is struggling to squeeze out new highs and the bullish momentum is starting to die down.

Zooming out, we can see bitcoin has been confined within a fairly clean ascending channel and has well-defined support and resistance along the Fibonacci Retracement set.  The channel and Fib set start from the $600s:

Figure_3 (13).JPGFigure 3: BTC-USD, 1-Day Candles, Macro Channel

One thing of note in this macro trend is dramatic decline in total volume (shown in pink) over the length of this ascending channel. The decrease in total volume shows a decrease in confidence as the price continues to climb to new highs. As the volume continues to decline, it indicates a shift toward retail investor pressure and a smaller buying influence from larger, institutional investors.

If the market begins to reverse on a macro scale, we can expect to find support along the Fibonacci Retracement values shown above. Also, on the 1-day candles, there is historic support along the 50 EMA and 200 EMA. Over the course of the last year, bitcoin has yet to successfully break below the 200 EMA (shown in red), so we can expect to see a significant level of support along the 200 EMA.

With the uncertainty surrounding the upcoming hard fork, it’s fairly difficult to anticipate how the market will behave. It’s important to keep in mind that it is entirely possible it could make further moves upward; should the market pick up bullish momentum, we can expect a test of the upper trendline of the ascending channel near the lower $7000 values.

Summary:

  1. Bitcoin is continuing to show characteristics of a distribution phase.

  2. On a macro-scale, Bitcoin is signs of bullish exhaustion in the form of RSI and MACD divergence.

  3. If the market pulls back, we can expect to see support along the macro Fibonacci Retracements.

Trading and investing in digital assets like bitcoin and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.

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Bitcoin Price Analysis: Potential Wyckoff Distribution May Spring New All-Time Highs

Bitcoin Price Analysis

A potential Wyckoff Distribution phase is under way as bitcoin continues to climb on shaky ground. Days after having a strong $1,000 climb and nearly reaching $6,000 on most exchanges, we saw a strong rejection of the upper limits of the market as it plunged $600 over the course of a few short hours. Let’s take a look at the macro pattern and draw a few similarities to the Wyckoff Distribution schemes:

Figure_1.JPG

Figure 1: BTC-USD, 2-Hour Candles, Potential Wyckoff Distribution Phase

In order for the current distribution phase to be reliable, there are certain milestones the market must reach. As shown above, we previously established a point of Preliminary Supply, a strong Buying Climax, a knee-jerk reaction into an Automatic Reaction low, and a weak rally that ultimately led to a Sign of Weakness that pushed us down several hundred dollars. The rebound from this low was strong and occurred on very high volume. However, over the length of the rally post-sign-of-weakness, the volume has begun to taper as the momentum indicators are showing signs of bullish exhaustion as it finds its local high at around the $5,700 values.

One of the following milestones for the Wyckoff Distribution phase is one last dip as it tests the previous support around the Automatic Reaction low. As of the the time of this article, the current market trend is showing signs of bearish divergence on the 120-minute candles.  Zooming in closer, we can see clear signs of a potential small reversal:

Figure_2.JPG

Figure 2: BTC-USD, 30-Minute Candles, Waning Momentum

Both the RSI and MACD are showing signs of bullish exhaustion throughout the length of this rally. Any pullback will likely be supported by the Automatic Reaction support level. Historically, this has been a strong point of support and is made more evident on the 60-minute time frame:

Figure_3.JPG

Figure 3: BTC-USD, 60-Minute Candles, Strong Support Zone

The 200 EMA on the 1-hour candles is historically a great support level and provides traders a pulse on the market health. As of the time of this article, the 200 EMA is lining quite nicely with the support zone offered by the Automatic Reaction Zone. A test of these price levels would take a strong push to break and hold below. If the price continues through the Wyckoff Distribution, we can expect a test of the 200 EMA and a subsequent bounce triggering an Upthrust to new all-time highs. As mentioned in the last BTC-USD market analysis, we are trending along a macro channel:

Figure_4.JPG

Figure 4: BTC-USD, 1-Day Candles, Macro Ascending Channel

An Upthrust in this potential Distribution Phase would have a price target testing the upper channel in the $6,200–$6,300 price range.

Summary:

  1. A potential Wyckoff Distribution Phase is playing out.

  2. If the Distribution Phase plays as expected, we will see a test of the 200 EMA and a subsequent spring to new all-time highs.

  3. If an Upthrust to new all-time highs occurs, we can expect a price target in the $6,200s.

Trading and investing in digital assets like bitcoin, bitcoin cash and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.

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Ether Price Analysis: Eve and Adam Could Be Turning Back the Bulls

Ether Price Analysis

Since bottoming out around $200, ether has spent several weeks bouncing back and forth inside an ascending channel:

Figure_1 (15).JPGFigure 1: ETH-USD, 4-Hour Candles, Ascending Channel

For the last month and a half, ether’s trend has been contained within the bounds of this ascending channel, where it has continued its bullish rally. However, today (as of the time of this article) it is starting to make moves to aggressively test the lower boundary. Specifically, as ether tests this channel, it is forming a potential reversal pattern called an Eve-and-Adam Double Top.

Figure_2 (12).JPGFigure 2: ETH-USD, 1-Hour Candles, Eve-and-Adam Double Top

At the time of this article, ether is attempting to break the neckline (the pink dashed line) of the massive reversal pattern. Should ether break this neckline, the measured move from this pattern is a $30 move downward, which would ultimately shove ether outside the bullish ascending channel it has been trending within. The price target of the Double Top breakout would bring the ETH-USD price into the upper $200s.

On a macro scale, ether has support along the following Fibonacci levels:

Figure_3 (12).JPGFigure 3: ETH-USD, 4-Hour Candles, Fibonacci Levels

Should the ascending channel break, the above Fibonacci levels will provide support and will need to be tested in order to prove a bearish continuation. As of the time of this article, the Double Top mentioned in Figure 2 is sitting right on the 23 percent retracement values where it is making attempts at breaking it. There is strong support at these values, so if ether can break and hold below $315, it will send a strong bearish signal to the market.

Should the Double Top complete, we can expect a test of the 38 percent retracement values following the break of the ascending channel. At this time, the 4-hour MACD is showing strong bearish momentum on a macro scale, and the market is picking up sell volume.

Summary:

  1. For weeks, ether has been trending within an ascending channel.

  2. Ether is currently in the process of making a strong test of the ascending channel via an Eve-and-Adam Double Top reversal pattern.

  3. If the Double Top breaks downward, we can expect a break of the multi-week bullish channel and a test of the 38 percent Fibonacci Retracement values.

Trading and investing in digital assets like bitcoin, bitcoin cash and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.

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Bitcoin Price Analysis: Bitcoin Rally Shows Strength for Continued Growth

Bitcoin Price Analysis

Today, bitcoin reached a new all time high as it rose by $500 in just a few short hours. At the time of this article, bitcoin is sitting in the $5300s as it looks ready, once again, to spring for a new all time high:

Figure_1 (14).JPGFigure 1: BTC-USD, 4-Hour Candles, GDAX, Macro Trend

On a macro level, BTC is showing signs of upward strength as the RSI and MACD are showing bullish strength. There are no clear signs of bearish divergence yet and the market is starting to pick up in volume as the price climbs, thus indicating that a healthy bullish continuation is likely. Looking at the 50 and 200 EMAs, we can see the slope is pointing upward and the market is trending well above both EMAs, showing us that the market is pushing upward in a sustainable manner.

On a micro level, there are slight signs of bullish exhaustion that may indicate the need to either consolidate sideways or pull back slightly before continuing upward:

Figure_2 (11).JPGFigure 2: BTC-USD, 30-Minute Candles, GDAX, Micro Trend

The MACD and RSI are showing clear signs of bearish divergence on the smaller timescales (shown via the red arrows on the indicators). Also, the current growth is decreasing in volume which usually indicates a lack of buyer interest at the current price levels as the trend continues upward. It’s important to note that the trend can remain healthy on a macro scale, while simultaneously remaining divergent on a smaller timescale. The divergence doesn’t imply a macro reversal — it simply means the current trend is lacking momentum to continue upward in the immediate future and likely needs to cool off before continuing any further.

On the higher timescales, bitcoin appears to be adhering to the ascending channel shown below:

Figure_3 (11).JPGFigure 3: BTC-USD, 1 Day Candles, GDAX, Ascending Channel

Since the beginning of the year, bitcoin has adhered to very nicely to this channel where it routinely tests the top, then tests the bottom, then tests the top, and so on and so forth. If we continue this pattern we can expect to see bitcoin test the $6000s before we see any major correction. However, it is important to note that, compared to Bitcoin’s last bull run to the $5000s, the volume is considerably lower. This may affect bitcoin’s ability to push toward the upper bounds of the channel. On the other hand, the indicators discussed in Figure 1 are showing healthy bullish signals, so we will have to see how the market responds to tests of new highs.

Summary:

  1. Bitcoin found new all time highs in the $5300s after having a sudden $500 rally.

  2. The macro momentum indicators are showing signs of bullish continuation which may push further new all time highs.

  3. The smaller time frames are showing signs of bullish exhaustion so we may see some consolidation before any bullish continuation is seen.

Trading and investing in digital assets like bitcoin, bitcoin cash and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.

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Bitcoin Price Analysis: There May Still Be Some Life in These Exhausted Bulls

Bitcoin Price Analysis

Over the last week, the BTC-USD market has seen some major price swings. At one point, the price nearly reached $4500 only to see it pull back down to the low $4100s. And now, within two days, the price has topped back out in the low $4400s. There has been some major chop and seemingly erratic dumps and price hikes, but overall there seems to be a common upward trent within the macro market movements:

Figure_1 (10).JPGFigure 1: BTC-USD, 4-Hour Candles, Bitfinex, Macro Trend

Since the bottom of the bear run last month, bitcoin has seen several rallies that have continued along a generally positive trend. The figure above shows a trend of higher highs, higher lows and an upper/lower boundary that is converging. This type of price activity is called a rising wedge.

Coupled with this price growth is a trend of decreasing volume throughout the length of the wedge. A rising wedge is generally a bearish trend that shows weakening bullish pressure as each subsequent rally becomes smaller and smaller. As the price corrects, there are rallies that bring the price to new highs, but ultimately rally on smaller and smaller volume.

As of the time of this article, the latest rally has failed to make a new high in the low $4400s. A breakdown of this wedge could lead to a substantial price drop of approximately $500 below the point of breakdown. The approximate price target would be around $3700.

Although rising wedges are bearish in nature, that doesn’t mean new highs aren’t in store for bitcoin. The macro trend is currently showing a potential bearish move, but there is still some strength in the market. The market is currently trending above the 50 EMA and 200 EMA which, by many standards, is representative of a trending bullish market. Although the price is trending upward and the overall EMA signals are showing potential upward continuation, there are pretty clear signs of bullish exhaustion on the macro scale:

Figure_2 (10).JPGFigure 2: BTC-USD, 4-Hour Candles, Bitfinex, Bullish Exhaustion

As stated earlier, the rising wedge is paired with decreasing volume which is a clear giveaway that upward momentum is waning. To complement this exhaustion, the RSI and MACD are showing clear signs of bearish divergence in the current market and are demonstrating a lack of the bullish momentum necessary to sustain a bull market.

If the rising wedge breaks to the bottom, we can expect the support levels to lie on the Fibonacci Retracement values shown above. The ultimate price target of the rising wedge would have BTC-USD testing the 50% retracement values.

On a very, very macro scale, there are clear signs of overall bullish exhaustion since the beginning of its run from the low $1000s:

Figure_3 (10).JPGFigure 3: BTC-USD, 1-Week Candles, Bitfinex, Macro Bullish Exhaustion

Two very clear indicators of bullish momentum loss lie on the RSI and the MACD. The price of bitcoin has pushed to strong, new highs but it has left the momentum indicators weakening. The RSI is showing strong macro divergence, and the MACD is on the verge of flipping bearish for the first time since the ETF was denied back in April.

It’s not hard to argue that bitcoin has seen heavy price growth and needs a little room to breath. It is entirely possible the market won’t see any strong pullback and it may go sideways. However, in the event that a sustained market pulls the price down, we can expect to find support along the midline of the Bollinger Bands in the low $3000s. It’s important that the above chart and market implications of this macro divergence are occurring on candles that are one week. So, while this doesn’t mean the market will just suddenly plummet, it is important to understand that a substantial price drop could be in bitcoin’s future.

Even though I gave plenty of bearish arguments, it should be noted that these predictions are on a macro scale, and the immediate trend is showing strong support along the 50 and 200 EMAs. The market is bullish until proven otherwise. As the saying goes: “the trend is your friend.” Bitcoin has had one heck of a year so far, but I think it’s important to point out the clear signs of a macro bullish exhaustion:

Summary:

  1. Bitcoin is finding support and showing a bullish trend along the 50 and 200 EMAs.

  2. On a macro level, the trend is pushing upward but is showing a potential bearish move if the market breaks out of the rising wedge identified in Figure 1.

  3. A breakout of this wedge would have its price target in the $3700s.

Trading and investing in digital assets like bitcoin, bitcoin cash and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.

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Bitcoin Price Analysis: BTC Makes New Highs as the Market Tests Historical Support

Bitcoin Price Analysis

Throughout the weekend and continuing into the early week, BTC-USD saw a strong rally that brought the price from $3500s to prices in the high $4100s, at the time of writing. Amid global turmoil and Chinese news that initially appeared to be bearish, BTC-USD has seemingly found its bottom and is now working its way onward and upward. Here is a look at the current state of the market and what we can expect in the coming days:

Figure_1 (9).JPGFigure 1: BTC-USD, 6 Hour Candles, GDAX, Macro Fibonacci Retracement Values

At the time of this article, BTC-USD is encountering resistance along the 61% macro retracement values. Resistance at these values is expected to be strong because it had found previously strong support during the beginning stages of the previous bear run. It’s not expected to make a clean break, so a possible, small retracement may pull the market back slightly before continuing upward. Even though we may see a slight pullback, it was very clear that the market is now leaning bullish:

  1. The market is currently finding support on the 6-hour candle’s 200 and 50 EMAs. Typically, when the market is trending below the 200 EMA it is said to be “bearish,” and when the market is trending above the 200 EMA it said to be “bullish.”

  2. The current market trend is pushing the price to new local highs. A trend that brings new highs shows a changing of tides as the bears begin to capitulate and the bulls begin to take over.

  3. On our current rise, the volume is increasing. When the volume increases within the trend, it shows there is strength in the current direction and is likely to continue.

  4. The 6-hour MACD is showing no signs of divergence and every new high is being accompanied with new highs on the MACD histogram. Currently the macro trend is showing strength with bullish momentum.

If we zoom into a small timeframe and look at the 2-hour candle trend, we can see a similar, bullish sentiment beginning to form:
Figure_2 (9).JPGFigure 2: BTC-USD, 2-Hour Candles, GDAX, EMA Cross

Inside the rectangle within Figure 2, we can see that the 200 and 50 EMAs have crossed and are now showing a positive slope with their curves. Historically, the 200 and 50 EMAs for the 2-hour candles have been a great indicator as to the immediate health of the market.

If a bear market makes a strong enough move upward and the 50 EMA crosses the 200 EMA to the top, this market activity is sometimes referred to as a “Golden Cross.” It’s called a Golden Cross because it is a strong market indicator that usually shows the turning of the tides as the bearish traders give way to the bullish traders.

Although there may be some pullback before we climb any higher, we have strong support in the $4100s so it wouldn’t be surprising if we made a test of that support level before climbing onward.

The $4100s also coincides with the 38% retracement. The 38% retracement is a very common retracement value within strong bull runs. Markets rarely make decisive, healthy moves in a singular direction. Often, they take a stair-step type of trend that moves up, retraces, moves up, retraces, ettc. The 38% can be seen as the first stair within our current bull market.

Summary:

  1. BTC-USD managed to make a new high and break the multi-week long descending trendline.

  2. BTC-USD is showing macro trend strength but will likely see a little pullback before continuing higher.

  3. If we do see a pullback, we can expect strong support in the $4100s.

Trading and investing in digital assets like bitcoin, bitcoin cash and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.

The post Bitcoin Price Analysis: BTC Makes New Highs as the Market Tests Historical Support appeared first on Bitcoin Magazine.

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