THIS WEEK ON BITCOIN
This was price action observed this week, from last week’s price analysis (highlighted). A predominant sideways,, range bound action featured last week, but was bound to break out at some point. On 5 September, market broke out upwards from a $233 – $225 trading range. The first signal of an upper break out was naturally followed by buy volumes, propping price up to a $248 – a 3 week high. A consolidation followed, typical after strong moves breaking past significant moving average lines, followed by a double top second attempt at higher prices that failed at $247. As I write this, price hovers above $239, and this level is no coincidence, as are all the rest.
The first breakout required enough buying pressure to break past 50 day & 100 day EMA and 100 day MA, all which cut across around $235 – $238 zone. Once this happened, the next average line target was EMA at $248.8, which held strong, pushing down on price to find support at resistance now turned support ($238).
So far, this illustrates intent by bulls to have a go out higher price levels. Based on these charts, 200 MA at $ 256 and 200 EMA at $ 248 are reasonable targets for further upside. For potential downside, possible rebound targets and test for support strength are 100 EMA at $240 and possibly lower at $ 235, 50 and 30 EMA & MA convergence points.
On the 1 day chart, a better perspective of the past 3 weeks of price trend. Since the top at $ 318 to a deep V-bottom at $ 195, market has retraced 38.2% so far, and is yet to convincingly break this level. 38% and 50% retracements are popular for resuming previous trends. Watch this level for support towards $ 255 at 50% fib, or a dip below to find support for a stronger move up. Thin volumes since heavy buys after 1st and 2nd dips, points to buyers holding out for higher prices.
Toni Gallipi, BitPay CEO tweeted: “Incredibly bullish technical pattern right now #bitcoin followed by a link to this chart on tradingview”
Some interesting thoughts via tweet responses:
anon >> “so where do you think that “new money” will come in into Bitcoin from new consumers/users out there? All I see now is some rich investors having fun screwing up the remaining peeps shorting and longing BTC for months now bouncing btw 200-315.”
T Gallipi >> “from gold. funds will diversify into bitcoin instead of gold in macro uncertainties. BTC is much more portable”
anon >> “Bulls Got margin called.The backtest is a dis-investment sell. Now followed by a bounce in a continued downtrend.”
T Gallipi >> “look at the volume on the daily and weekly charts. that tells a different story – accumulation.”
anon >> “Purely speculating, where do you see the top for/if next rally”
There is a clear divide on whether we’re off to break the bear trend and into a new phase, or perhaps back to down to fresh lows. Additionally, a pertinent question on whether MACRO uncertainties have fully kicked in. I expect MACRO events to be the ultimate trigger to take Bitcoin mainstream and price to the moon.
AXA investment bank eyes Bitcoin Remittance market
NewsBTC reported this multinational investment bank, through its VC fund, is looking to explore cryptocurrency for cross border money transfers. AXA Strategic Ventures, the bank’s $223m fund, and its accelerator, AXA Factory, are logical paths to onboarding startups in this space
Final Silk Road bitcoins’ auction draws near, 44 000 BTC
According to Coindesk, a US Marshals Service (USMS) spokesperson said this auction was slated for this year, but chose not to be specific on exactly when. It remains to be seen how this last set of 144,000 BTC supply, confiscated from Silk Road, will affect the market.
Australian-Based Bitcoin Group Looking to Raise $20 Million Through IPO
Block Zero reports this group owns 1.7% of mining share, about 6.2 Petahashes located primarily in China (98.5%). Looking at its prospectus, it plans to channel funds into boosting daily bitcoin production and network market share. Once listed, it will trade under ticker BCG, with trading set to kick off on November 11, 2015. 2 Bitcoin companies are now listed on Australia’s Security Exchange – Digital BTC being the first.
BITCOIN PRICE FORECAST
This week I am neutral to bullish, with similar targets to last week $ 255. The recent high may require some sideways action from consolidating, and look to find firm support for a bounce back up. Potential support levels are EMAs and MAs (50 d and 30 d), at around $235 currently. Targets on upside rebounds are 200 EMA at $247, fib level at 50% – $ 255, and 200 MA at $ 260.
I recommend caution as these are short term targets for the next 2 weeks. Breaking below $220 invalidates this bullish forecast. Medium to long term, I am bearish, and still expect sub – 200 prices. This long term trend channel chart points to a possible retest of lower trend line support. It is worth a keen look, as overall, price remains in limbo – whether we truly are past the bottom and long term bear trend, or just a temporary reprieve from a 22 month old bear market.