Posted by: pesa_mic
July 29, 2015
This week was mostly a sideways range bound trend, that didn’t break out until Friday/Saturday. Marubozu – a flat ended long candlestick is common in break outs, to force past resistances or support. What followed was a gradual trend approaching $ 300 in a series of steps – highest top at $ 298. At the time of writing this, price is at $ 295, and another flat trend is seemingly taking shape. Perhaps gathering steam for another [expected] breakout?
From last 2 weeks, we see it is part of a developing trend after a top retracement at $316. I posited a reversal with a low target of $ 250 in last week’s analysis; $ 271 was the effective reversal point, bouncing a second time off $ 273, up to price now marked by an arrow.
The 1 week chart I regularly track bounced off 23% fibonacci level, reinforced by 30 Day EMA. To complete, the Marubozu candle should be fully retraced in green candles. Its upper level is key to break, likely reinforced by 200 and 50 day EMA. Watch the trendline from $ 166 on any retracements down.
On the 3 day and 1 day chart respectively, the price halted at $ 298 where 100 day EMA line cuts across. Similarly, on 1 day charts, we see a local level at $ 273 forcing price to bounce after finding support. These indicators are targets to look out for when trading as ‘feels’ for market intent on a certain a level.
Like the $309 mark for instance has been fascinating over the last 6 months.
“Such a quick trip over it [ $ 300 ] in Late Feb/Early March then long drop after, and then more recently popping up over and a pretty reasonable retrace. Current climb seems pretty steady though. This bull seems to be getting stronger.”
My forecast this week is bullish to neutral, with target of $320 – $335.
The channel delineates a path to higher targets – if $ 320 folds. Recall the cup with handle pattern from last week which is yet to fully form. It has to break over $ 309 to excite entry positions. Almost everyone is watching this pattern keenly, along with the entry price – watch out for FOMO (fear of missing out).
A slight reason to be cautious despite bullish forecast is the decisive market levels – greater than $ 320 or below $ 270. Bulls really need to breakout on this one. With all that is going on on China’s Stock Market, and finger pointing at suspected Chinese gold bear raiders, bitcoin is within ripple effects of spillovers.
“The Chinese are getting in the mood to short everything. Once they realize they make more money with their money by putting up as margin shorting than buying becomes the new fad. You think they won’t short Bitcoin too?”
Shanghai Stock Market, plunges one day Historic 8.48%
More turmoil in the Chinese markets persisted, even after unconventional government efforts to prop up the market and maintain calm. This time, the composite closed at near lows dropping 345 points; the largest since 2007, February. Additionally, “since the Shanghai Composite peaked in June, it has lost 28% of its value” , reported ZeroHedge
PBOC and authorities will pull out all the stops, going as far as buying as into 10% in stakes of listed companies. A stern IMF demanded normalized intervention by officials in Beijing. Certainly a market to watch considering speculative interest in cryptocurrency from the world’s second largest economy.
Gold breaks multi-decade support
The Chinese get blamed for everything, like Mondays unexpected, precisely timed sell off, that triggered stop losses in a majorly illiquid market session, all within a 60 second window. The market support at $ 1080 broke, after “investors dumped more than $500 million worth of bullion in New York in four seconds” said Zerohedge
‘The “Mystery” Gold “Bear Raider’ whose intention now seems clear, “breached the $1080 gold price which also happens to be the multi-decade channel support level.”
Global Macro Investor Raoul Pal talks bitcoin on July Newsletter
Infamous macro investor Raoul Pal, of Real Vision Television TV, briefly covered bitcoin on his latest newsletter ‘Group Think. . . Again’ (on scribd) on global macro expectations across multiple assets. This chart on bitcoin’s formation pattern was posted on his twitter.
A former Goldman Sachs Hedge fund manager, he has often voiced his $ 100,000 valuations of XBT, more than once in the past year. His high profile and clout amongst top investors is a win for XBT by any measure whenever he talks bitcoin!
Brian Armstrong, CEO of Coinbase this week tweeted : “Many will find this crazy, but I think bitcoin could surpass the dollar as reserve currency within 10-15 years.”
As I scrolled through comment sentiment, I saw people are divided on whether this is a realistic expectation of a nascent cryptocurrency which ‘checks all the boxes’. One thing we all seem to agree on, its properties as a feasible commodity
“…with slight intrinsic value, artificial scarcity, production limited by the economics of mining. Bitcoin does serve to a high degree as medium of exchange, and to a somewhat lesser degree as store of value.”
It is massively undervalued in my opinion, regardless of its prospects as a world currency.