Bitcoin Price Analysis April 14th

Posted by: pesa_mic

April 14, 2015

There will be blood.

This week, our bullish forecast last week played out favorably and is still unfolding with prices now at $217. After a dull flat sideways trend, prices were unable to break a ceiling at $262. This resistance was marked a last attempt at higher prices but, collapsed, resetting the bearish trend we have been expecting.

Consecutive support levels from February’s retracement $166 were broken, following brief intervals of consolidation. Unlike the past 3 weeks, consolidation periods were short lived compared to the larger corrective. Strong volume followed the breakout to price, now at $220 support level.

This was a midweek chart prediction on bitcointalk.org by Afrikoin.

Just like last week, the 3 week period of seemingly steady prices was a larger corrective wave on a 1 day chart. Noticeably, RSI in instances of correctives move up with the price, then a sharp decline with impulsive moves; at times a gradual decline in tandem with price. RSI usually moves with the price. It’s when it diverges that it becomes a good topping/bottoming signal.

EMAs are well above current price levels – particularly the 50 day, 100 day and 200 day – At $255, 50day EMA will be a major resistance in the medium term. Swaps have levelled out, down below 24k,both moving in tandem. The market has absorbed the decision point (bearish) after weeks of ambivalence.

It closely resembles the corrective wave from October 2014, when price retraced from $ 275 low, went up to $478 and resumed down to fresh 11 month lows ($166). Both capitulations were similar. $275 bottom retraced up 73% in 25 days; while $166 bottom in february retraced 90% in 12 days.

The bear market continues to shake off weak hands and retest new lows and quite possibly, break down to new lows.

Bitcoin Fundamentals

Australian Central Bank will not regulate bitcoin

Two representatives from the RBA payments department, Tony Richards and David Emery, spoke on bitcoin at Senate inquiry in Sydney on tuesday, according to the Australian Business Review

In an opening statement, Dr. Richards said

‘Digital currencies do not currently raise any issues for the Bank in terms of the Bank’s monetary policy and financial stability mandates,’

While addressing a Senate committee, both representatives emphasized potential future regulation would depend on significant growth that raised public interest concern.

Coinsetter Bitcoin exchange acquires Carvitex for $ 2 million

Carvitex exchange will be acquired by New York’s Coinsetter, as reported by Venturebeat , valuing it at $2 million. Its trading infrastructure, is set for an overhaul according to Jaron Lukasiewicz, CEO.

“We will also be adding order books in new currencies on both Cavirtex and Coinsetter. The integrated trading liquidity and security of both exchanges will provide an unmatchable global Bitcoin platform to Bitcoin users everywhere,”

Bitcoin price forecast this week

This week I am expecting the bear trend to continue in the short term, plus we should expect lower prices. $200 support level is a crucial level for bears; if it breaks then price of 100s are not unrealistic. The next significant support after $ 200 would be $166 low from 2 months ago.

A trader highlighted the significance of this level

“The funny thing is that the majority of longs will not close anytime soon. They will close only if when it goes in the 100s or double digits. Like it happened on the downtrend before the $150 crash, the real long squeeze happened relatively near the bottom.”

Ergo: Levels of 100s in the coming weeks will likely ignite real fireworks.

This forecast holds if no unexpected exciting news for the market comes out. News driven run ups have occurred in September PayPal (13% up) news and Microsoft news (8% up). Bear this in mind.

EW expert analyst DanV spoke on Bitcoin – It’s likely prospects for 2015 and beyond a hangout (here), pointed out the real possibility of 130s and at worst $80 levels. The market is seemingly finding a bottom. Only then will supply be exhausted enough for price to move up on a rally. Extremely good news (eg Wall Street money) would catalyse such a move and take prices to new price levels.

It seems bitcoin is uncorrelated with VC flow, present state of industry, favorable regulation on the up and significantly more going for it than last April when price hit $1163. But, the market amalgamates demand and supply forces which play out according to human sentiment ie market participants. It is easy to discount the effect of this on price action, but, its increasingly becoming acceptable as behavioral economics.

A persistent long term channel has limited prices to within a range trending down. An earlier attempt at $300 tested upper channel resistance but failed. The channel leads all the way down to low $80s.

The bear trend continues.

Updated: 2015-04-14