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Bitcoin Price Analysis May 5th

Bitcoin Markets this week

1This week, prices continued a trend up, after last week’s bottom at $213. Red support line shows how far up this week’s action was, topping out at $243. Admittedly, my forecast of a retest of $200 lows (and possibly lower) has been delayed. Short term market sentiment is now bullish, after a midweek green candlestick spiked up to $240. $240 top resistance level has now been tested twice – both times unsuccessful.

2Fibonacci lines from $166 bottom to $ $315 top reflects why prices have stalled around this zone. As market psychological levels, breaking up or down past these zones is a process – such as several attempts. Since 2 weeks ago at $217, price action is held within a range by 61.8% and 50% fibonacci lines. The run up this week has invigorated bulls, and some analysts are expecting this trend to continue.

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Exponential moving averages (lagging indicators) track change in trends – short, mid. long term depending on days set. This chart captures 200, 100, 50 and 30 day EMAs on a 12 hour chart frame. 100D and 50D have defined price ranges (top and bottom) for now; notably, 100D resistance line at $240 was tough to break, confirming why this a significant level. 50D and 30D are now acting as support, given both are acting together at around $232, this level may hold well. If 30D cuts above 50D – a bullish crossover – higher prices will continue, up to test 100D again.

There are implications of such a move for short term prices. Interesting to note how all EMAs are lining up sideways. For me, 200 D, at around $255, will be definitive for how far up this move lasts. Read on for bitcoin weekly forecast.

Bitcoin Fundamentals

This week, Coindesk reported Swedish Nasdaq exchange approved a Bitcoin denominated Electronic Traded Note to be traded on its platform. Bitcoin Tracker One certificate, issued by Stockholm-based XBT Provider AB, will launch on 18 May. Also owned by KNC miner, AB will hedge all sales on bitcoin markets, matching equally.

“We are aiming to do all hedging in the open market but have the option to access bitcoin liquidity from KnC Group in case of an emergency.”

Bitcoin Magazine posted an article on Bitcoin Investment Trust’s GBTC Trading on public Markets officially under the ticker GBTC. Following bids by Maxim Capital (50,000 shares), KGA Americas and some individual investors, only 765 shares exchanged hands – about 76.5 bitcoin. Michael Sonnenshein, Director of Sales & Business Development at Grayscale Investments tweeted

first trade was for 2 shares @ $44.00

Sidenote:

Response to comments from 29th April analysis

ORANGE: […] solid background on terminology. Could you guys point me to some references for study?

I recommend picking up as many different technical analysis tools and techniques as you can for objectivity. Steve Nison’s – Candle Charting Collection focused mainly on Japanese Candlestick patterns plus some bonus stuff. You could also pick A. Frost’s and Robert R. Prechter’s Elliot Wave principle while a good start guide is stock chart’s EW section and generally stock chart for TA terminology.

MKT: Each and every time this guy posts an article about BTC price he is wrong in a way.

My forecasts won’t always get the price right down to the last cent; these are approximations with margins of error. My target for $210 for example, came close at $213. What is important is to be on the right side of trends, riding them when you can, staying out when not sure and knowing when to come in. Weekly analysis are limiting in that a lot changes within the week – it is not intended to be definitive, just a guide.

Bitcoin Price forecast this week

My medium to long term forecast remains bearish. At some point after this brief move up, I expect the market to have another go at breaking $210 and depending on how that holds, possibly sub $200.

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The upper bound of long term channel from $982 has held strong multiple times, with every advance to break it opposed. Pink arrow point to current prices, a cross point of channel and lateral resistance line at $237 (give or take).

Current unfolding of a short term uptrend isn’t convincing enough yet to mark a solid trend reversal from a bear market. Earlier in our analysis for instance, we observed several levels aligning with EMAs that would have to be broken and sustainably held – 50D & 30D at around $232, 100D now at $240 and long term 200D at $255 – all on 12 hour time frame. Caution is necessary riding the current move; critical points to watch if this price action continues as per

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The lower purple line is acting as support for last week’s uptrend. As it heads higher, $240 marked by an arrow is the first critical point to observe for sign of weakness and collapse. The next point after is $270, which matches with channel resistance line from $982 from January 2014.

This adds to levels pointed to by EMAs and fibonacci extension lines. Until these points flip, I will reserve calls of a trend reversal.

Finally, perspective on an even longer term chart, dating back to 2013, offers insights on a long term support level that has been tested multiple times in the past. Recently, $166 flirted with this line, bouncing back up. For long term trend reversal, this line is handy, now that we’ve struck it once already.

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TLDR: Short term price up. Watch out for $240s, $255 and $270 else, medium term forecast still bearish. Test of $200/$210 possibly $185 later on.

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