Bitcoin Price Analysis 11 October 2016
In the past 2 weeks the Bitcoin price displayed resilience by rising up gradually from $595 on September 28 to $615 on Bitstamp as of writing this. The series of higher highs and higher lows is a convincing start to the $800 + price target traders project. Experts all seem to agree price is going up soon. Meanwhile, Bitcoin fundamentals were up for discussion at the Bitcoin Scaling Conference in Milan, Italy. Progress on Segregated Witness and Lightning network portend higher valuation for BTC. But, unresolved fungibility issues and an expected hardfork still bedevil fundamental risks on price in the mid- long term.
On the weekly chart on Bitstamp, price is at a crucial point teetering on the $610 resistance/support edge. This level dates back to 2014 December all throughout 2015 into July. It was a strong support when price sold off from the all time high, but turned into an upper resistance in May 2015 when price attempted to break back above it. The coming days are critical. If this trading range holds, up to $560 on the lower limit, a bounce up (in red arrow) is inevitable.
Price has been on a trend up, forming higher highs and higher lows since september 22. This trend is a gradual retrace of a sell off from $630. The 8 day preceding run up to $630 was a fake break out. This makes $630 a terminal alert price, and thereafter $660. Ongoing consolidation here may precede a long buy candlestick, to break strongly through this level.
A fork paired with trendlines from January 2015, asserts the bullish forecasts. The bottomed price sits on a trend line at 2 similar junctures: September 2015 at 1 and May 2015 at 2. L Thinning trading range at level 3 suggests support on the trend line. The worst case for a bullish trend to $800 is a dip to the lower trend line, around $590.
But, the pattern forming here is a 5 wave trend up after a flat consolidation over 8 months. One more leg up is due.
Even the 200 and 100 moving average lines are about to make a bullish cross. A cut above the longer term line will be a bullish trade, similar to i, ii and iii.
Bitcoin Experts Bullish on Medium Term PriceTrader sentiment across the board is mostly bullish, as the market mostly expects a break to higher prices in the medium term. It’s only a matter of time. From previous price run ups, like August – November 2015 and May – Junel 2016, some experts have built a reputation for making right calls on price forecast. And this week, they made public their bias.John Bollinger of the famed BB technical analysis indicators said“I suspect that the time is near to pay attention, though the length of the Squeeze suggests a trade rather than a trend.”
Toni Gallippi , CEO of BitPay, made a great call to $665 back in April. This past week he tweeted“#bitcoin consolidation preparing for a BIG move. The next 30 days could be quite epic. set alert 612. breakout alert remains at $612. Target $800.”
Ex Goldman Sachs Hedge fund manager, now Global Macro Investor who called for a triangle break out in April 2016 is bullish, claiming increased demand from the Chinese. He tweeted
“Bitcoin has currently become a capital flight tool for Chinese. It correlates decently enough with the Yuan. Key driver of price right now”
Russell Newton, Cofounder of the first regulated bitcoin investment vehicle, tweeted,
“BTC-CNY poised for a pop here? Looks like it to me. #bitcoin #GABIjersey”
$1.5 Billion Janus Capital Fund Manager Recommends Bitcoin
Bill Gross, a veteran hedge fund manager, touted Bitcoin on Bloomberg TV, as an alternative asset class for investors fleeing Central Bank coordinated QE madness. The billionaire bond manager warned of the ramifications of QE by the Federal Reserve, Bank of Japan and European Central Bank on savings, investment and economic growth.“New financial technologies such as bitcoin may become increasingly attractive to investors as a protection against central bank low- and negative-interest-rate policies”The emergence of Bitcoin at a time when monetary policies are experimenting like never before offers an alternative next to gold. Gross compares bitcoin to gold in this Bloomberg Video.
Bitcoin Weekly Price Forecast
The forecast for the coming weeks is bullish. It would be foolish to be contrarian, with the fundamentals exhibiting support for a bullish up trend, coupled with forecasts of $800 from expert investors and Needham, an investment firm. The target is $800 and possibly up to $1000. My trade right now is from $611 and I plan to sell at $850 or higher. Happy to settle for $800.
This chart shows the downside risk to be cautious of, and the upside target if the $570- $600 level holds. This zone is generally a good region to buy. Unless an unexpected event (the black swan type) unfolds.
This week, I expect a burst up past $630, to a 61.8% retracement from the BitFinex hack sell off low. $660 coincides with a fibonacci retracement level and the breaking point of a triangle.
Some consolidation is expected at $645 – $660, before another leg up.