Posted by: pesa_mic
May 20, 2015
This week, price movements were mainly uneventful and dull. After last week’s run up to $249.22 and subsequent retest at $ 245.49, prices retracted to find support at more familiar territory. An impulse break to the downside – marked by a large red candlestick – kicked off sideways trends that is now in force. Support for this elongated trend lies around $230 levels (give or take). An attempt to shake out weak hands at $229 has done little to offer a decisive direction.
Weak – low volumes continue to feature in this trend up from low $213 despite breaking multiple Exponential moving average lines (30, 50, 100 and 200 day) on 6 hour time frame. On 1 day, 3 day and 1 week charts however, prices are well below all EMAs and it will take some time or huge movements to change this. Support at $230 which has now resisted two attempts to break into lower territory is holding well – for now. $225 is the price to watch as spreads are squeezed.
On 1 day timeframe, a big move is brewing, telling from white upper resistance and lower support lines forming a wedge triangle pattern; usually, these are terminal and precede a decisive move. There has been little movement in either direction, as a decision point draws near. A sideways trend has to end at some point, when weaker hands cave in and price follows.
RSI also supports ambivalence, hovering within neutral levels 40 and 50. StochRSI however, is at oversold levels (below 20). Even at these levels, it is still not definitive. At times, a double dip of StochRSI results in a dip into lower price levels. On the other hand, this double dip may form a base for a move up. The middle band of BB is upper resistance for this trend; for any rise up in price, it has to be broken and contact made with upper band of bollinger.
So with all these indecision, what to expect of prices this coming week?
Bitcoin Fundamental News
New York Stock Exchange bitcoin index (NYXBT) goes live
Through a press release, Intercontinental Exchange (ICE), an American holding company that owns the NYSE, announced its launch of NYXBT – “the first exchange-calculated and disseminated bitcoin index”. The index will comprise an average of the price of 1 BTC across US exchanges that meet its measure of quality. Coinbase, is currently the only feed data for the index.
NYSE Group President Thomas Farley was quoted
“Bitcoin values are quickly becoming a data point that our customers want to follow as they consider transacting, trading or investing with this emerging asset class,”
World’s first Bitcoin-based security on Swedish regulated exchange
Bitcoin tracker one, an exchange traded note (ETN), began trading this week on Stockholm Stock Exchange, trading 3% below its listing price at 9.68 SEK.
Alexander Marsh, CEO of XBT Provider speaking to Bloomberg said,
“By enabling this easy and secure way to invest in Bitcoin we hope to have eliminated the boundaries that earlier prevented individuals and companies from being able to actively invest in what we believe to be the future of money.”
XBT Provider, along with KNC miners are subsidiaries of KNC AB Group who promise to hedge all sales on public bitcoinmarkets.
Bitcoin price forecast this week
Still bullish short term with targets of $255, $263 and $270 as stated previously, but, just for the short term. Depending on key price levels, outlook may change within the week. Breaking $225 level for instance would mark the end of our short term expectations of higher prices. Testing it is not enough as sometimes, traders will attempt to shake out longs by slightly piercing through well known support levels. A proper collapse of it is key.
The above EW count from 2 weeks ago is still valid. B, is likely the low level price right now and could go lower to $225 without invalidating another leg up (C ) to $270 or even higher. This means last week’s drop from $249 to $229 is a reversal of some degree (d e), before resuming a trend up.
That said, however, volumes on this trend up (from $166) on a larger timescale are not convincing for a supposed trend reversal; therefore, i expect a retest of the lows to kick in once this trend fizzles out OR if bears force $ 225 to collapse. Why? Because A confirmed bottom and thus trend reversal will usually exhibit some characteristics
- MACD crossing over into green territory
- High volume (capitulation)
- Impulsive rises corresponding with rising volumes
An upper resistance line dating back to late 2014 – early 2015 has to be broken for good measure and add to other indicators for a solid confirmation of a reversal. This is where the past 2 weeks of rise in prices is seemingly headed – to retest. Until then, in my opinion, the bear market is still in force.