Bitcoin price analysis 14th October

Posted by: pesa_mic

October 14, 2015

BITCOIN MARKETS THIS WEEK

This week the price of bitcoin mostly trended sideways, after breaking resistance at $241 and heading up to a peak at $249. What followed was a consolidation, a counter reaction to the preceding sharp rise. A slow grind downtrend followed and found a bottom just above $242, reaffirming this level as strong support. The tweezer bottom, a candlestick pattern considered to be a short term bullish reversal pattern, is visibly clear. In hindsight, this was a bottom for the uptrend that followed up to $253. As I write this, price on Bitfinex sits at $250.

Price has been trending up since the $224 bottom on September 21, along with the 21 day exponential moving average line providing support. Current price levels are teetering on key indicators. There is no clear signal as multiple indicators have converged around this zone – caution is advised, especially on any more upside.

“Honestly, this whole move is ridiculously bizarre. Market participants just don’t have a fucking clue what to do right now.”

On the one hand, $250 is a significant psychological barrier, but the break up to $253 should have gone up to $260 if indeed, there was real intent. But then, there is a reluctance to sell down below $250. Additionally, volume to justify this week’s run up is lacking

The 200 simple moving average line is almost horizontal, and cuts across this $250 level. It would not surprise me to see price hug around this line. Sideways price action combined with choppy up and down movements – all centred around this line.

Encircled 2 is a break or make point, largely due to moving average lines (MA) crossing right above current price levels. Last month (encircled 1), this same average line pushed back attempts at $316 and $293 to break above it. Even if price strongly breaks past this point, there is the matter of holding above it. A double top pattern, similar to encircled 1 in July and August, looks likely here.

EMAs on the 3 day chart confirm a significant resistance at this level. (1 and 2) failed to break past 100 day EMA. Subsequently, 50 and 30 succumbed to selling pressure at (3). The current uptrend will require enough momentum and intent to break above both 50 and 30. Any further advance above this level will encounter more resistance at (5) – 100 EMA. Recall the run up to $316 was mounted on the back of Greece bailout crisis speculation.

Where will similar momentum come from? I see unconvincing fundamental news or events to support a similar run up.

Chart above offers more evidence supporting the significance of $ 250 zone. It is a similar – ish pattern comparable to June – July (1,2,3,4) and current 4 on the right.

“The striking similarity in price action is that all the key levels marked 1-4 have basically been respected. Essentially what I’m looking for now is where price stalls number 4 far right and begins to retrace”

Question is whether this pattern will repeat itself like in June OR, will be different this time round.

BITCOIN WEEKLY PRICE FORECAST

This week I am neutral to bearish. I expect a sideways price action; if any upside does occur, it will be limited. At this point, I am looking at lower prices and a resumption of the bear trend.

BITCOIN FUNDAMENTAL NEWS

Impressive Global Bitcoin growth on P2P exchange Localbitcoins

This week, charts on BTC peer to peer exchange volumes were released, a pleasant surprise for many bitcoiners. Data from localbitcoins.com different countries of operation, exhibited growth globally and for many countries featured including the USA, Kenya, Venezuela and Russia. The US was an interesting data set showing a steady upward march with more and more volumes. 40,000 BTC on average were traded per day globally.

“I am going to go out on a limb and say we are getting close to a major move up”

Indeed, these numbers look good, especially considering data from centralized exchanges is not included. Based off these charts of BTC adoption, there are suggestions we are close to the next big move. All charts can be viewed on Coin Dance.

Blockstream announces Commercial Side chains codenamed ‘Liquid’

Sidechains, a long awaited project, finally had something to show when it announced its instant settlement sidechain for Bitcoin exchanges. Speaking to Bitcoin Magazine, Austin Hill, CEO at Blockstream, projected a product release in early 2016. He highlighted the benefits for exchanges, brokers, traders and institutions to circumvent slow block confirmation times on the main blockchain, while still leveraging its decentralized POW property.

“sophisticated traders look at bitcoin’s confirmation times as a negative, and really do need the type of speed of markets that Liquid can offer.”

Side chains uses a 2-way peg, using bitcoins as reserve currency. This fact excites many, because it retains bitcoin as a censorship proof bearer asset – good for the price and future of Bitcoin.

Commonwealth Central Bankers Skeptical about Bitcoin

Coindesk reported, at a meeting late last week, 30 Central bank governors convened to discuss policy framework for digital currencies. While the event was centred on bitcoin with regards to remittances, its impact on monetary policy and financial stability was voiced by some bankers.

Trinidad and Tobago CB governor was quoted saying

“If we decide to regulate virtual currencies, we are unaware of the financial instability risks posed by this currency. This is an area we need to determine carefully.”

Bitcoin regulation seems certain at this point, it’s more of a question of when rather than if.

Updated: 2015-10-14