Weekly Bitcoin Price Analysis; Trying To Break Free

While the Greeks’ No-vote with regard to a rescue deal for their debt crises by European financial institutions put bond investors in a panic on Monday, 6 July 2015, the Bitcoin price soared to the upper 10% of the envelope of the 1-day 200MA to $275 and 1700 CNY. Bitcoin investors were wondering whether the price will keep rising or make a downward curve after the Greece hype. Technical indications in the Bitcoin price chart and global markets might give an indication of the direction Bitcoin prices were heading.

Bitcoin price chart_Bitstamp, as of Monday, 6 July 2015

Bitcoin price chart_Bitstamp, as of Monday, 6 July 2015

It was suspected that, with the RSI and double stochastic divergence compounding, prices might fall. Although MACD was not confirming a downward movement, the fact that this might become a reality was shown by the fact that the volume of trade had decreased. The stochastic were also currently showing a very high overbought, which in the past, had been an indication of wave highs and lows.

It was suspected that market reaction to the European trading session could alter this analysis. Gaps down in equities as well as the Euro forex pairs had been observed, but investors were slowly closing these gaps. The fact that gold had also made a smaller advance on the referendum outcome could also be influencing the current Bitcoin position.

Bitfinex orderbook depth and Buy/Sell Volume, as of Monday, 6 July 2015

Bitfinex orderbook depth and Buy/Sell Volume, as of Monday, 6 July 2015

On Tuesday, 7 July 2015, kept rising at first, but as suspected, dropped below $270 and it was suspected to drop even further to a three wave decline. Interestingly, the RSI regular divergence did not repeat a previous occurrence of reverse divergence.

Bitcoin price chart_Bitstamp, as of Tuesday, 7 July 2015

Bitcoin price chart_Bitstamp, as of Tuesday, 7 July 2015

Bitfinex orderbook depth and Buy/Sell Volume, as of Tuesday, 7 July 2015

Bitfinex orderbook depth and Buy/Sell Volume, as of Tuesday, 7 July 2015

On 8 July 2015 it was clear that the Greek referendum had caused the Bitcoin price to get stuck between two converging envelope lines at approximately $265 and 1650 CNY. This meant that the price would wind sideways between the lines until it “chooses” a direction.  Depending on the direction to be selected there could either be an advance, where the price could make a sudden break toward the 1-day 200 MA, or a decline, where the price could drop through the 100MA 10% envelope below. At that moment, a decline was not good news for investors trying to short the decline. However, it could be a good way of building a long position. Although the Bitcoin price had declined more rapidly than expected, the distance was not greater and it had not yet reached the upper envelope line of exchange charts. It could be expected that the market would test the level at about $262 and 1630 CNY.

The RSI indicator had also diverged to the advancing price wave. However, the MACD did not confirm this, nor did the stochastic indicator. This could be an indication that the wave was tending upwards again.

Bitcoin price chart_Bitstamp, as of 8 July 2015

Bitcoin price chart_Bitstamp, as of 8 July 2015

Bitfinex orderbook depth and Buy/Sell Volume, as of 8 July 2015

Bitfinex orderbook depth and Buy/Sell Volume, as of 8 July 2015

On 9 July 2015 the direction of the Bitcoin price was still looking very uncertain at $267 and 1672 CNY. However, it was possible that the most recent price high might just yet touch the upper blue trend line. Although one more declining wave was not plausible, the chart still had room for one more. With the challenges facing the Euro Zone, the China equities crash and the problems with regard to the New York Stock Exchange, the advances wasn’t showing much more momentum and volumes than the decline.

Bitcoin price chart_Bitstamp, as of 9 July 2015

Bitcoin price chart_Bitstamp, as of 9 July 2015

Bitfinex orderbook depth and Buy/Sell Volume, as of 9 July 2015

Bitfinex orderbook depth and Buy/Sell Volume, as of 9 July 2015

On 10 July 2015 the Bitcoin price had reached a high of $280 and 1740 CNY. The bottom MACD had settled on its zero line, while the Bollinger Bands were contracting. The top RSI had smaller amplitude and was hovering in the middle of its range. The Bitcoin price seemed to be slowly rising by 20MA toward 200MA. There was a possibility for a fake-out, which could have gone either way. Prices could drop into a final corrective wave before resuming an advance. However, it was advised that investors not be overly cautious, since this could be a great investing opportunity.

Bitcoin price chart_Bitstamp, as of 10 July 2015

Bitcoin price chart_Bitstamp, as of 10 July 2015

Bitfinex orderbook depth and Buy/Sell Volume, as of 10 July 2015

Bitfinex orderbook depth and Buy/Sell Volume, as of 10 July 2015

Chart source: BFXDATA  xbt.social

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