Bitcoin price had steadily advanced in an upward curving wave for several weeks. Yesterday, price neared the 2000 CNY psych level corresponding to our target at $320 and turned down. This morning, following news out of Brussels about a new Greek austerity deal, price plunged through $300 and is busy regaining consciousness down below.
Bitcoin Price Analysis
Time of analysis: 13h37 UTC
Bitstamp 15-Minute Chart
From the analysis pages of xbt.social, earlier today:
An impressive sell-off and it begs the question: did the news announcing that there will be no Grexit cause the move? Or was the sell-off going to happen anyway?
Elliott Wave Principle and the Socionomics Institute, argue that news is merely a catalyst that prompts the market to do what it was going to do anyway. There are various technical indications that heralded the decline. Arguably, its development and extent has caused nothing unusual to unfold in the chart.
Notice that the market high was made yesterday, at 14h00 UTC, near $320 and the 2000 CNY “psych” level earmarked as a likely reversal level in yesterday’s analysis. Also, accompanying the high is divergence in both the stochastics (top) and the MACD indicator (bottom).
From the high, price traces 5-waves downward (label “1”), 3-waves upward (label “2”) and a 5-wave structure that declines to a second low beneath the 20-period moving average (20MA). A small move higher (“ii”) fails to get back above the 20MA, and an hour later, the news about no exit for Greece has the market capitulating the decline that has already been in progress for more than 12 hours.
In the 15-minute chart, above, we see the decline heading for the purple 800MA. This moving average is the equivalent of the 1-hour chart’s 200-period moving average (200MA). A non-crystal ball xbt.social technical analysis, yesterday, highlighted the possibility of a decline to the 200MA – not only in the 1-hour chart, but all the way to the 1-day candle chart’s 200MA near $250.
Should the decline continue to $250 or lower, it is unlikely to happen in a day. Instead, we may see frequent upward corrections interspersed with price drops to the downside. From the current position near $285 / 1780 CNY, the market may engage in bargain hunting back to $300 and 1900 CNY, before additional waves of selling ensue.
xbt.social member discussion
Experienced traders control risk, inexperienced traders chase gains. – Jim Rohn
Regardless of the correlation between a “No Grexit” deal and today’s price plunge, we now look for technical clues of the market’s next move. The market may now have lost faith in the advance and continue taking profit to $262, $250 and lower. However, if large players use the opportunity to bargain buy, we might see the rally reignited, but unfortunately, the only confirmation of advance lies $40 higher above $320. Time to step back and assess the market’s mood.
Bitfinex orderbook depth and Buy/Sell Volume:
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Bitcoin price charts from TradingView.
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