Bitcoin Price Analysis 24th June

Posted by: pesa_mic

June 24, 2015

BITCOIN MARKETS THIS WEEK. . .

This week, bitcoin was largely in a retracement, down to support at $240, following profit taking after the past 2 weeks of a decent run up. As a former resistance level in the past 2.5 months of restricted range bound sideways action, $240 is holding well. The range now is within an upper $247 level and lower $240 support. The low volumes on this trend suggests traders are still holding out for higher prices and even, buying on the dips.

“I see what you are seeing. Consolidation and accumulation after a sizeable move. Some profit taking obviously. Looks very good to me. I am long here.”

There is reason to be optimistic, in the short term at least.

“The form of the drop is clearly corrective, suggesting that there is more to come in any case.”

“The implications of breaking up out of the grand log trend are unclear but indeed interesting. but I think the attitude towards trading here should only be moderately bullish.”

Looking at the long term log scale, the resistance bear trend line was tested once at $259, current consolidation points to another go at the trend line. Depending on your bias, how this plays out in mid-term will confirm if the bear trend is still alive, or if we are past it. As I will elaborate later on, my opinion is a retest of low 200s, right after the market completes this corrective wave. (ie price movements against the trend).

On 3 day charts, it is clear how crucial this zone is. At encircled points, a bullish cross from moving averages resulted in a short rallies breaking up, but, afterwards resuming the main bear trend. Question is, how far up will market prices go up this time?

A similar picture is observable on the 1 week chart as well.

Fibonacci retracement levels from January’s bottom at $ 166 upto a subsequent peak at $ 317; 61.8% and 50% were the lower and upper range over the past 2.5 months. 30 and 50 day EMAs resisted any moves up, but, finally buckled under buying pressure last week. This set up a move that went on to break 100 day EMA and 50% fib level. 100 day line is now acting as support; given its proximity to $240, this level should be a strong support for further upside.

“Technical analysis of the 240-minute BTC-USD price chart conveys that the cryptocurrency is well poised for the next leg of its rally. However, the support of $240 must not be violated.”

BITCOIN FUNDAMENTALS

Barclays UK jumps on board blockchain wagon

Business Insider reports Safello, a Swedish online bitcoin exchange start up, will work closely with Barclays in testing use cases for traditional banking processes on the blockchain. The start up, which was part of Barclays Fintech accelerator, has reportedly etched a deal. This follows similar moves by major banks and financial institutions such as UBS, Nasdaq and a report authored in part by Santander that estimated

“. . .that blockchain technology could reduce banks’ infrastructure costs by up to $20 billion (£12.8 billion) a year.”

Bitcoin Block Size Debate Persists

The debate over whether or not to increase the cap limit of bitcoin blocks continues as different experts take separate views on the issue. On one side is Gavin Andresen who is proposing a hard fork to code 8MB increases. To this end, he has obtained the support of of miners controlling 60% of capacity. On the other extreme are opponents who say this could lead to a crisis that could see the currency forked into two. Brian Cohen, creator of distributed file sharing network BitTorrent, shared his opinion on an article favoring no action and labelling reasons for proposed changes as an ‘Ironic crisis’

Sidenote Commentary

I consider this a significant event for Bitcoin, and I find it hard to imagine it not impacting the price somewhat. Seemingly, the sort of event that if it went awry, could easily cause market panic and quite possibly, massive sell offs. Oddly, price has held steady over this whole debate, even going up in the past couple of weeks. From my past analyses, and now, I expect prices to go lower at some point in the mid term, regardless of any short term bullish expectations (such as the current one). In fact, this back and forth blocksize hurls, might just be the perfect catalyst for fresh 2 year lows.

BITCOIN PRICE FORECAST WEEKLY

This week i expect price to continue consolidating; a dry dull sideways trend likely to remain above $240. More upside potential remains, as far up as $280, but, realistic targets now are $260, $ 266 upto $ 270.

Caveat: any upside moves will be limited to a maximum level of $300, because this move, whichever form it takes, is a corrective – dating all the way back to $ 213 lows. A corrective wave is a temporary deviation from the main trend which, still a bear market, is far from over. On the 3 day chart, this maps out as:

In this sense, as per Elliott Wave rules, wave 2, cannot retrace more than 100% of wave 1. Therefore, my level for invalidating further moves down in the mid term, would have to break $300 and further. Otherwise, any upside will be limited upto $ 300. Here is a more detailed wave structure breakdown

Updated: 2015-06-24