Bitcoin price took the declining path, yesterday, and bounced from the 1-day 20MA in most exchange charts. The prospect of continuing decline is on everyone’s mind, and analysis posted here for the past few weeks has favored a large decline. xbt.social analysis remains biased to the downside, but there is an argument to be made for resumption of advance from current levels.
Bitcoin Price Analysis
Time of analysis: 04h50 UTC
Bitstamp 1-Day Chart
From the analysis pages of xbt.social, earlier today:
A look at the 1-day Bitstamp chart shows that the decline halted near the 20MA (green arrow).
The decline from $292 to $275 unfolded in five waves and a comparison of yesterday’s 5-minute chart to the price wave inside the blue rectangle reveals a wave-by-wave similarity.
One concern is that price had come within a few dollars – but did not touch – the 20MA in some exchange charts. We’ll return to this point in a minute.
The question is, now, whether price will continue lower and target the 1-day 200MA (red arrow) or whether advance will continue?
Comparison with the 1-day chart of September 2013 suggests that price may form a correction, at current levels – maybe a protracted holding pattern – prior to a decline to the 200MA. Alternatively, as circled in magenta near the center of the chart, price may push below the 20MA in the coming day or two and then correct below it before completing the last of decline to the support floor.
Coming back to the matter of the 20MA (that remains untouched in some charts): a third scenario is that price completes one more subwave to $272, on the weekend, touches the 20MA in all exchange charts, and then continues advancing beyond $320.
xbt.social traders take profit
Experienced traders control risk, inexperienced traders chase gains. – Jim Rohn
We have some confidence from technical indications in the 1-hour chart that price will not continue lower immediately, yet the current bounce from the 1-day 20MA does not guarantee advance has resumed. The critical level is the 1-day 20-period moving average (20MA). How price positions in relation to it during the coming days will give us more clues about the larger trend.
Bitfinex orderbook depth and Buy/Sell Volume:
What do readers think? Please comment below.
Readers can follow Bitcoin price analysis updates every day on CCN.LA. A Global Economic Outlook report is published every Monday.
The writer trades Bitcoin. Trade and Investment is risky. CCN.LA accepts no liability for losses incurred as a result of anything written in this Bitcoin price analysis report.
Bitcoin price charts from TradingView.
Image from Shutterstock.