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Bitcoin Price Analysis: Bitcoin Bulls Find Respite Along Major Support Lines

Over the last week, bitcoin has seen an aggressive markdown from the $12,000s to the $6,000s — a 50% move in 7 days. Right now, a battle between the bulls and the bears is under way as the market is trying to decide if today’s rally is a temporary bottom or a decisive end to the aggressive bitcoin bear market:

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

To date, the market has broken number lines of support including the daily 200 EMA. The daily 200 EMA has been a strong support for the last few years and has been a pivotal marker when determining the health of the trend. At the time of this article, BTC-USD is testing the macro 61% Fibonacci retracement values shown above. Last night we blew right through that line of support, and today we are attempting to test it from the bottom to see how strong the support has been turned into resistance.

Figure_2.jpgFigure 2: BTC-USD, 4-Hour Candles, Current Trend

The image above shows a massive swell of volume leading into an aggressive fall and a sharp bounce. Whether this bottom is an absolute bottom of the bear trend remains to be seen, but it is unlikely we will be making any new lows anytime soon. We are testing very strong support right now and the effort it would take to break this zone of support is high.

On a much higher time frame, bitcoin has managed to find support:

Figure_3.jpgFigure 3: BTC-USD, Weekly Candles, Macro Support

The weekly 50 EMA has managed to provide very solid support at the moment and is likely to prove difficult to break through in a solid pass. For now, we have strong evidence that a local bottom is in.

Summary:

  1. An aggressive drop of 50% in one week leads bitcoin to see a sharp rally from the $6,000s.
  2. There is strong macro support here and there is a very solid argument that a local bottom has been found.
  3. Whether this marks the end of the bear market remains to be seen, but for now it seems unlikely that we will see lower lows in the immediate future.

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 eBits.Co 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.


Aerospace engineer turned crypto-market analyst. Bitcoin Schmitcoin became popular within the subculture of the Reddit communities and now posts his daily thoughts and market outlook via Twitter and his regular stream on Twitch.tv.

Bitcoin Schmitcoin on Twitch.tv

Bitcoin Schmitcoin: YouTube

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Ether Price Analysis: Rising Bitcoin Tide Lifts ETH to New Target High

As Bitcoin breaks its own all-time high (ATH) on multiple exchanges, it appears as though a rising tide raises all boats.

mrkt cap.png

Most important, GDAX/Coinbase, a crucial on/off ramp for digital currencies, has taken the lead in ETH/USD volume and is reporting higher ETH/USD than BTC/USD volume over the past 24 hours.

gdax.png

gdax usd.png

This is anecdotal evidence for a key metric of “new money” coming into the space. Although the $4–5 premium remains on Bitfinex due to USD withdrawal halt, GDAX now leads in volume and holds a small premium above a few of the other exchanges as well. Poloniex and ETH/BTC volume continue to lead globally (not shown).

Ethereum hash rate also continues to push ATHs almost daily, showing strong confidence in miner support.

For weeks now, I’ve been watching the slow formation of the head and shoulders bearish reversal chart pattern. The pattern convincingly formed with the appropriate and important descending volume profile.

h s 50 200.png

The trick with trading these patterns is to not jump the gun. The short entry signal is always a break of the horizontal support on volume. That never happened. Instead, price held above the 200 EMA and refused a bearish 50/200 EMA cross as well. When reversal patterns form and do not play out as expected, that is generally considered to be a strong continuation sign.

It’s also possible that this was simply a bullish continuation pennant all along, with a measured move target of ~$115 (0.088).

pennant.png

Going forward, we should watch for price to test previous local highs and push for the 1.618 Fibonacci extension, yielding a target of ~$115 (0.0873).

bear div.png

There is also a high probability that a higher high in price will not yield a higher high on the Relative Strength Index (RSI), a momentum oscillator. Although this result is days or a few weeks away at this point, watching out for this now will prevent you from entering a trade based on emotions. Sure, price can go parabolic at any time and break the rules of divergences, but should a divergence form, it suggests continuation is far less likely than reversal. We will also want to be watching volume. If volume does not break previous local highs, it adds to the bearish divergence confluence, all of which would suggest bullish momentum is waning.

Summary

  1. As Bitcoin breaks ATHs, it’s likely that any digital currency on associated on-ramps increases as well, simply by association.

  2. Bitfinex ETH/USD premium continues and should continue until USD withdrawals resume, if ever.

  3. Although chart patterns and indicators were leaning bullish, price did not break down and is now projecting a target of ~$115.

  4. Watch for the new Ethereum ATH to occur and create a bearish divergence with a swift pullback in price.

Trading and investing in digital assets like bitcoin 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 eBits.Co and BTCMedia related sites do not necessarily reflect the opinion of BTCMedia 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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Price Analysis: Cryptocurrencies Hit $100 Billion Market Cap as Bitcoin Reaches for New Highs

Bitcoin approaches a new all-time high (ATH) in price and market cap as we re-enter a mode of price discovery. All of this occurs in the settling of an unresolved block size and scalability debate set to be disrupted with the UASF on August 1. Cryptocurrencies, as a whole, now hold over $100 billion in market cap for the first time. While bitcoin (BTC) leads the pack at just over $46.6 billion, or 47.9 percent of all cryptocurrencies, the recent surge in these other coins has helped to push the total cap over the top.

Since the Bitfinex hack low on August 2, bitcoin has traded better than JP Morgan, Goldman Sachs, Tesla, Apple, Google and gold. One of the few stocks to match the frenetic pace of bitcoin has been Nvidia, which is up over 200 percent since July of last year.

percetn comp.png

Bitcoin is also trading much better than all the major payment processors including Visa, American Express, Mastercard, Capital One, Discover and PayPal.

payment processors.png

The strong upward trend of global OTC volume suggests this is not an isolated incident, limited to Asian countries alone, but indicates organic growth of price worldwide. The deflationary aspects of bitcoin are having an unquestionable role in shaping the supply/demand curve.

ALL.png

Although China, Japan and South Korea are trading at a ~$100-plus premium compared to the exchanges in the United States, most of the volume in the past 24 hours has been driven by USD.

usd.png

There is no certainty of a top until bullish momentum and buying are exhausted, but you can use Fibonacci extensions, previous fractals and pivots to find resistance targets.

Price broke the critical resistance level of 50 percent of the pullback on June 1 and has not looked back. Each Fib has shown both support and resistance on the way up, so with a reasonable degree of probability, the Fib extensions should be seen as resistance targets as well. This would bring price in the zone of $2,950–3,300 on the index.

blx 1h fibs.png

Looking at the bigger picture, the Fib extension of the previous down fractal yielded a price almost three times the low. Using those same Fibs, this would bring the price to around $6,500 when this next run-up is all said and done.

fibs ath.png

There is also a growing bearish divergence with higher highs in price and lower highs on RSI (white diagonal line). The bear divergence can be negated with new high on RSI. Last, monthly pivots also yield a resistance maximum (R5) at around $5,800.

Summary

  1. A new ATH is extremely likely, with continued demand for bitcoin and cryptocurrencies worldwide.

  2. Despite the heavy premiums in Asia, USD trading volume leads the rally.

  3. Based on technicals, targets above $3,000 are extremely likely in the near future.

Trading and investing in digital assets like bitcoin 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 eBits.Co and BTCMedia related sites do not necessarily reflect the opinion of BTCMedia 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: With August 1st Looming, Uncertainty is the Only Certainty

With only 3 days left before Bitcoin’s hardfork is implemented, there is still great uncertainty among BTC-USD markets (which inherently applies to all cryptocurrencies) and what their imminent fate will be. One would expect, with so much market uncertainty, that BTC-USD should be seeing dropping prices as people begin to sell their BTC in lieu of other fiat and crypto-assets. However, in a surprising turn of events, BTC-USD has managed to climb by over $300 within the past 24 hours. Because the speculations regarding the BTC hardfork vary wildly, this market analysis will look at the raw data presented on the markets and will not attempt to account for any of the hardforking ramifications.


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The figure below shows two indications that the BTC-USD climb is due for a consolidation period and possibly some pullback in price:

Figure_1_2HR_Candles.jpgFigure 1: BTC-USD, 2HR Candles, Bitfinex, Momentum Loss

The first that stands out with the current $300 rise is the decreasing volume throughout the length of this little bull run. Decreasing volume indicates the decrease in market interest in these higher values and typically leads to either a consolidation period or a pullback in price to garner support from lower values.

The second indicator that stands out is the 2HR MACD divergence shown in pink. Typically, for a healthy bull run to sustain its upward momentum, we would like to see the MACD making new highs on the histogram to accompany the new highs in market value. Looking closely, you can see the most recent high of approximately $2800 did not correspond to a new high on the MACD histogram. Thus, another indicator of market momentum loss reveals the increased likelihood of market price consolidation.

As always, it is important to put the current market trend within the context of the grand picture:

Figure_2_Hidden_Divergence.jpgFigure 2: BTC-USD, 6HR Candles, Bitfinex, Hidden Bearish Divergence

Looking at the 6HR candles trend, there is a subtle hint of macro bearish divergence on the MACD. When the MACD signal line/moving average makes a new high, but the price trend does not make a new high, this can be an indication of bearish leaning momentum called “hidden bearish divergence.” In addition to the MACD hidden bearish divergence, we can see a severely decreased volume trend as we approach the highs made a couple weeks ago. In general, the upper $2000s seem to be a battleground that is starting fizzle out in a bearish fashion. This could be attributed to many factors, but ultimately I think the wild price swings can be easily explained by the great uncertainty in the market surrounding the August 1st hardfork.

With only 3 days left, speculators are getting situated in their positions. Until the hardfork is implemented, there is no telling what will happen to the BTC-USD markets or the cryptomarket as a whole. So, with all this uncertainty in the air, where can we expect to find levels of support in the event of a major crash on August 1st? The figure below shows the key support levels to look for on the macro scale:

Figure_3 (2).JPGFigure 3: BTC-USD, 12HR Candles, Bitfinex, Key Support Levels

Once again, the key support levels for the macro trend are found along the Fibonacci Retracement values of the entire bull run. Immediately below our current values lies very solid, historic support at $2500 values. A test of this support value will ultimately dictate the immediate future of the BTC-USD market.

On the run up to $2900 a couple weeks ago, a lot of volume went into the market to develop firm support. A breakdown of this support level could prove to be quite destructive to the BTC-USD market in the short term. The $2500 support level is clearly shown in the massive influx of volume and proves to be a severe point of market interest. To date, that is one of the strongest support levels BTC-USD has established, as indicated by the rise in volume around those prices.

Summary:

  1. On the macro and micro levels, BTC-USD is showing indications of price consolidation in the near future.

  2. Key support levels are found along the Fibonacci Retracement values. In particular, $2500 has proven its historical significance in the market and should be closely watched in the event of a bear run post-hardfork on August 1st.

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 eBits.Co 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.

Aerospace engineer turned crypto-market analyst. Bitcoin Schmitcoin became popular within the subculture of the Reddit communities and now posts his daily thoughts and market outlook via Twitter and his regular stream on Twitch.tv.

Bitcoin Schmitcoin on Twitch.tv

Bitcoin Schmitcoin: YouTube

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