Bitcoin Price Analyses Feb-18 2016
This week the price of bitcoin held steady over and above a $365 floor, stretching back to January 14, 2016. The last time this support was breached, was on a cascade sell off from $446 on January 12, 2016, when a bear seemed to have resumed. The resulting sell off dropped sharply to $352 low, before bouncing back up and trading in a sideways range for the past 5 weeks. The upper limit was $430, with an exception, an unusual pump to $427. The lower limit has been $361, which has proved a fairly reliable support.
On February 11 this week, price turned bullish from a candlestick hammer on the 6 hour, making consecutive green candles up to a periodic $409 high, that has now retraced to $407 as of writing this.
On a short chart time frame, it seems bullish. It warrants a perspective on a longer time frame, the weekly chart seen below.
Here, a peak to peak fibonacci retracement from $152 low in January 12, 2015 to the peak at $504 in early November, 2015, shows price trending within the 23.6% ($420) fib and 38.2% ($368) fib retracement levels.
While in this range, price has bounced off $368 support enough times for a firm base to launch. $420 is the next reasonable target for another advance up. The spike from January 21 pump was rejected, so it will be interesting to see whether a gradual advance now stands a better chance at breaking up.
Price is respecting the limits of a larger triangle, seen above on the 3 d chart since November 2015. The converging end of it drawing close, and the result should be a terminal, a break out move on either direction. Any price rise will be limited on the upside by the descending diagonal. $440 is a reasonable target, after a break of $420.
“The dust is settling and we are moving Up, Up, Up!”
A local triangle broke out on February 13th. The 2 charts below show the break out, and expected path to target.
Exponential Moving averages on all time frames also support further upside, as price sits above the 30, 50 and 100 EMAs.
The chart above is the daily. After two attempts (1) and (2) at piercing above the average lines, the third attempt successfully broke through, riding on what was a firm support, the 100 day EMA.
The Simple moving average paints a cautious picture. Seen below on the daily, the average lines converging could mark a whipsaw choppy action, before a turn in either direction. Both the 50 and 30 day are turning south and could easily cut below 100 day – a bearish cross.
Upside however, is limited as _chewtoy_ suggests on /r/bitcoinmarkets
“BTC is absurdly overbought on lower timeframes and a correction down to the low $390s or high $380s is likely. FOMO is strong and dips are being bought with reckless abandon. Could see a final leg up to $420 or $430 before the red dildo of death emerges. What I’m saying is this level of buying is unsustainable and should correct sooner rather than later.”
Ethereum Price rockets 120%, Corrects 50% right after
This week, Ethereum made a further push to higher price, spiking up to $7.00 (0.01779 BTC) per Ether on February 12th, a 120% increase from a week ago. Right after topping, in typical bubble fashion, Ether corrected down to $3.9 a piece within hours, and has since retraced the whole move up. As of writing this, price sits at $4.
2016 has been a great year for Ethereum, as it has risen up past Litecoin and Ripple in overall market capitalization, now at $ 310,289,710, second only to bitcoin as per coinmarketcap.
China’s Central Bank Governor Says Digital Currencies Will Inevitably Replace Cash
This was the title of a news article which appeared on Chinese Bitcoin exchange, BTCC’s website. Governor Zhou Xiaochuan, talks up the coming shift in representation of money from cash to digital forms and the planned transition by the People’s Bank of China to align with this inevitable change. The bank plans to launch its own digital currency, as a means to efficient monetary policy control over its national currency.
Zhou, comes off as knowledgeable in matters pertaining to bitcoin, and makes no outright dismissal of the decentralized currency. I think China would be open to letting Bitcoin thrive, as a countermeasure against the US dollar, but, not without taking its own protective measures such as monitoring BTC – Yuan flows, that have been the basis of capital outflow speculation.
Bitcoin Weekly Price Forecast
This week I am bullish, with an eye on limited upside. I expect $420 to be broken, and a flight up to $430. Beyond that, I am cautious of a renewed up trend and will be watching for signs of weakness and a potential reversal. Upside limit, $440 max.