Bitcoin price touched long-term resistance in the Bitstamp chart, today. Although the picture looks different across different exchange charts it is clear an important moment for the longer-term outlook has arrived.
Bitcoin Price Analysis
Time of analysis: 15h00 UTC
Bitstamp 4-Hour Chart
From the analysis pages of xbt.social, earlier today:
A persistent push higher looks different in different charts. The price action of the past few days has been building additional advancing waves, but the wave patterns themselves do not yet resemble impulsive advance. This does not mean that a rally cannot continue higher – bitcoin price sometimes moves in diagonal waves that consist of 3 wave patterns (ordinarily corrective) but that advance with more ferocity than the orthodox Elliott impulse wave.
What makes the current juncture of price unclear is the position of price in relation to a set of significant trendlines in the surrounding chart area.
The first is the descending long-term resistance line (grey) that we have been tracking as a watershed for several weeks. The Bitstamp chart reached this significant trendline today. The OKCoin USD and futures charts have broken this trendline to the upside, while the CNY exchanges are about 100 CNY (~$15) below this trendline. With different configurations in the different exchange charts, this level does not give us a unified signal that the market has broken significant long-term resistance.
The second important trendline has developed since March of this year and is a rising trendline (blue) that caps the zigzagging price action from the early March low until now. Again, the Bitstamp chart, today, reached this trendline where it intersects with long-term resistance. This is not the case across exchanges – OKCoin futures, for example, still has several dollars of advance between its current high and its upside channel level.
Doubled Resistance Can Buckle
Sometimes price is rejected by such doubled resistance, but at other times the market uses such an intersection of two major support/resistance lines as a gateway through the compounded resistance.
During an attempt on this intersection zone, earlier today, Bitstamp traders failed to break through and price has since retreated. Another attempt may follow, or price may have reversed from the level already.
Divergence in the momentum indicators (magenta annotations) imply a strong correction or reversal that fits with the wave count for wave D.
The latter are, typically, irrational market waves that fits with the character of price action since March. If the current high is the final wave “e” of wave D, then a corrective triangle has completed in the chart. When a triangle forms within a larger correction, it usually forms in the penultimate corrective wave position. which means that a wave E to the downside is next. Bitcoin E waves can be devastating.
If price does manage to get above long-term resistance, then the alternate wave count (in red) means that a diagonal advance is unfolding and that wave C (of wave III) can strike out to $500 and beyond.
Bitcoin price added another subwave to the advance today. There is complete ambiguity about what happens next. If price can break above resistance across exchanges then a powerful rally should ignite. If the present downside wave continues lower then a strong decline may be looming. Let’s see what the market has been intending all along.
Bitfinex Depth Chart and Buy/Sell Volume
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Bitcoin price charts from TradingView.
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