Bitcoin price lurched to a nominal new high in some exchange charts and a lower high in most others. By the time of today’s xbt.social morning analysis the signs were in the charts: the bulls had given it all they could but had depleted their resources and energy. Will they, after a price correction, regroup and stampede again, or can the bears come out of their six-week hibernation?
Bitcoin Price Analysis
Time of analysis: 14h08 UTC
Bitstamp 4-Hour Chart
From the analysis pages of xbt.social, earlier today (04h00 UTC):
A move higher and toward an overhead resistance level near $250 and 1600 CNY across exchanges.
Once achieved, sometime today, price should correct lower. There are large orders in the orderbooks at 1600 CNY (BTC-China and Huobi), $250 for Bitfinex and Bitstamp, and $260 for OKCoin 3Mths.
What will happen after the obligatory correction lower is not clear? The raging bulls have achieved a minor new high despite weeks of compulsive buying. It may be that an attempt on the $250 / 1600 CNY level is successful (after a correction) and that the institutional bitcoin players then join the move.
Alternatively, a likely scenario that is opened up by the strained advance on overhead resistance is that a correction retraces price advance all the way back to $240 or the support floor near $220 and 1450 CNY.
We now wait for the current move to conclude, correct downwards and then we watch for the trade signal.
Current analysis: 14h08 UTC
The downward correction has set in and is finding support near the lower trendline of the wedge that price has been trading in since August.
As mentioned, earlier today, the bulls may now reattempt the overhead resistance level – they have certainly been determined, so far, in the face of strained advance!
What is also likely at the current juncture, is that price breaches the lower trendline (blue) of the long-term wedge that it has been correcting in. The trendline is near $244 and below it there are support levels (and, therefore, targets) at $240 and $220. A decline to the support floor could play out in a matter of a few weeks.
Never confuse movement with action. – Ernest Hemingway
The choppy and strained advance of the past month has culminated in a fizzled-out marginal new high, today. The retail bulls must be exhausted but they have achieved a lot, considering there was no sign of institutional participation on the way up. Not sure how many eager buyers remain at these overbought levels, so bitcoin price may return whence it came in the coming weeks. Buy-and-hold investors should switch back to 100% cash (fiat) positions until we either see a buy signal or a break above 1-day chart resistance – the 1600 CNY for BTC-China and Huobi, and the 1-day 200MA for the other exchanges.
Bitfinex orderbook depth and Buy/Sell Volume:
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Bitcoin price charts from TradingView.
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