A spectacular Bitcoin price surge has advanced to near $260 (Bitfinex) and 1638 CNY (BTC-China). The parabolic advance has left the market wondering about the next move and at the time of writing a bout of profit-taking has set in. The wave seems to be topping out in a familiar ending diagonal, whereby successive smaller waves punch to higher highs.
Bitcoin Price Analysis
Time of analysis: 16h58 UTC
Bitfinex 15-Minute Chart
From the analysis pages of xbt.social, earlier today:
A target zone at $258-$260 may be the final destination of an incremental ending diagonal, else – if the market finds the energy for another surge – we may see price run all the way to a target nearer $270. The latter target is a 4.618 Fib extension level, whereas the $258 target is a 3.618 Fib extension level – a more common destination for advancing Bitcoin waves.
This surge higher had happened very quickly and may have gone “too far, too fast”. While we acknowledge the advancing scenario and give it credence, we should also anticipate a scenario whereby the entire wave from $230 to $258/$260 can be retraced. This outcome is illustrated in the following chart:
The 1-day chart shows us the current wave in the larger context.
Bitfinex 1-Day Chart
Labels have been added to highlight a potential repeating price pattern. The uppercase ABC labels count the larger swings that the Bitcoin chart engages in, and the lowercase “abc” structures are local corrective structures. The labels are for the sake of comparison and are not meant to be a valid wave count. If this is indeed a recurring pattern playing out then we could see a breakdown to at least $230.
Both continuing advance and return to the consolidation area are possible scenarios. After the strong advance, it is unlikely – but not impossible – that price will launch straight back into another surge. We look for confirmation of continuing advance by price climbing above the 1-day 200MA (red). For confirmation of return to the downside we look for a) a top to complete near $258-$260 accompanied by RSI divergence in the 4-hour chart, and b) for 4-hour MACD to herald decline by crossing below its signal line.
The future should be viewed not as a fixed outcome that’s destined to happen and capable of being predicted, but as a range of possibilities and, hopefully on the basis of insight into their respective likelihoods, as a probability distribution. – Howard Marks
If ryo can keep a cool head he can make that 20% lead work for him – the hackedprogrammer is right behind you, ryo, probably with a virus, some spyware, and a forked version of Bitcoin XT, so keep a good distance.
The rest of the trading field are familiar names during this round and with their kind of gung ho we’ll certainly be seeing them again.
A spectacular rally, but it is doubtful this is the Big One. Price has left an area of contention in the chart, in a hurry, but may have gone too far too fast and a minor pull-back seems in order. Another high cannot be ruled out but the chart indicators are stretched to the max at all timeframes below weekly. Not to be ungrateful, we all say: Thank you, Bitcoin.
Bitfinex orderbook depth and Buy/Sell Volume:
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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.
Bitcoin price charts from TradingView.
Updated: June 17, 2015 at 9:44 pm CET.
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