Bitcoin Price Analysis
Time of analysis: 13h00 UTC
Bitstamp 4-Hour Chart
A look at the 4-hour chart shows few signs of what price action may be up to. The lack of a higher high or lower low on the intraday chart requires us to wait for more clarity.
Interesting, on this chart, is that the Bitcoin price shows little regard for the Fib fan lines once it embarks on an advance (left of chart). Price candles slice through the lines with ease. During corrective price action, it scurries between fan lines neurotically, like a squirrel checking and rechecking a multitude of secret buried nuts.
Readers wanting an explanation of the initial analysis of this chart and its indicators are referred to Saturday’s article.
BTC-China Daily Chart
Many analysts and traders prefer the BTC-China chart for its clarity and definitive movements. It will be regularly featured in this analysis series. An example fact from the BTC-China chart is that it breached the April 2013 top back in October of this year, thereby annulling the significance of this price level as rock-solid support. Despite the breach, BTC-China has not tumbled to new lows.
In the daily chart, above, two Fib fans have been drawn from the 2011 and 2013 bottoms. The proximity of current price action to the lowest .618 fan line extending from the 2011 bottom is significant. The next chart shows current price action in greater detail.
Before zooming in, also note the 20-period (green) and 200-period (red) moving averages. It is worth taking some time to study the relationship between price and these moving averages (MAs) during uptrends and downtrends. The past year’s corrective wave is the second occurrence, ever, of the Bitcoin price having consistently traded below the 200MA. Also, the 20MA strongly supports advance for its duration. Click on the chart for a larger image.
BTC-China 4-Hour Chart
The same chart with the same annotations zoomed to the 4-hour timeframe. The top-most fan line is from 2011 and the lower three emanate from the 2013 bottom. The proximity of price to the lower supporting fan line may be significant, yet the role of the 2011 lower .618 fan line (see the daily chart) is certainly more dominant. We can reasonably expect price to eventually breach the 2013 fan line in order to test the 2011 support. This can be achieved via decline to support or via sideways consolidation until price action and rising support intersect.
The behaviour of price in relation to the moving averages is worth noting. Notice what happens when the faster 20MA crosses over the 200MA. There are also two “fake-outs” pertaining to this phenomenon on the chart.
Holiday trade has the Bitcoin price chart in a waiting state. It isn’t a case of “nothing’s happening” – something is cooking up in the chart – we just have to wait for price action and our indicators to give us some confirmatory signs of direction and potential extent.
The Bitfinex trading volume widget shows an apparent predominance of buyers, yet buyers and sellers have been pulling price in different directions around the clock as evidenced by the past 24 hours’ sideways price action:
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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.