Bitcoin Technical Analysis

[sonofacoin]

Hi everyone,

This is my first post on the forum and I just wanted to share some technical analysis on bitcoin price.

The price as time of posting is $358.05 USD.

Last year in December the same coin was valued at 3.24 times today's price peaking at around $1160, or close to it.

Such drops in bitcoin price are not new in the history of the coin. Almost and exact drop happened at the beginning of 2013, when some people too were calling for the end of the coin. A massive selloff from $250's to the $70's. The factor is about the same as the current drop in price at around 3.4.

Of course, a drop from a thousand USD to the hundreds will get your attention. Percentage wise they are equal. And I am sure if we go back to later years we will find similar drops.

OK, so now to the current state of the coin based data form the surge in price from Nov 2013 to today, chart weekly:

1. The coin has been on an absolute downtrend, regardless of the little price bumps the trend has not been broken even once. SAR points indicate this. Started Dic 16th, 2013 and even today's data shows a bear trend.

2. The coin has burned through pretty much every weak support levels leaving behind three strong resistance points. $340, $440, and $624. The coin has spent about 8 weeks floating around these prices while burning quick though the spaces in between. The next bottom is around $200, and then $86.

3. The probabilities of heading to $86 are about the same as heading to$624, see the chart below. But the odds are in favor of heading higher to $440. Without sound historical data around these levels we are left with speculation only. So we would need to think or look for catalysts that will either drive the price down or up. I will leave the speculation to the forum to generate ideas.

4. Bitcoin's falling prices have charted a very nice pattern (or two)... One can immediately see what we call a Falling Wedge. And perhaps a Pennant. These tow resolve harshly on either direction up or down. Tracing the lines and we conclude we are almost at the end of this wedge or pennant and the price of bitcoin will resolve hard in one direction. Again, we need to look at what would cause the price to go up or fall.

5. Tracing both patterns we can generate a couple coin prices to keep an eye on the next couple weeks. We want to see a bounce of $305 if there is such  drop, and if it doesn’t hold, we want to see bounce from $252. Hopefully it doesn’t have to dive that low but it would be a great opportunity to buy coins.

6. Ok, enough of coin prices for now. MACD, a buying or selling indicator, is about to cross to indicate a buying opportunity. This has to resolve first before buying coins, unless you want to bet on a positive outcome. RSI, which indicates oversold/overbought conditions is pretty much in a very very oversold condition. In fact, on 9/29 RSI touched a level 30, which indicates greatly oversold conditions and since it has bounced. Both of these gives me an indication of a rally or at least that the coin can rally a healthy push from here.

Now, in a nutshell, the coin has one or two last support levels to bounce off $305 and $252. I, of course would be a buyer at these levels, but MACD and RSI tells me the coin is in a healthy mode to rally. Oversold is a technical state that stocks and coins don’t like and usually bounce from. So the coin may not drop that far.

At today’s level I would hold the coins we have and look for confirmation of a rally on MACD and SAR points. I would buy big on confirmation of a SAR only. MACD confirmation may indicate a small rally to $440 or even $624 before heading back down again.

And to leave with a sense of historical comparison, in 2013 the coin also created a falling wedge with a bounce around the fib line  0.764 ($69) before rallying to $1100’s. Why is this important? At today's price and on the last 6 weeks, the coin has bounced and played around $340. Which for this last rally, it is the Fib Line 0.764. The same level before the huge huge rally last year.

Thanks, and let me know if you have any questions. I’ll be more than happy to create more charts, or to share ideas on trading. Also, I would love to hear ideas on price catalysts.

The price of Bitcoin at the time of posting is $360.57 USD

*Edited in bold


  

[sonofacoin]

Money serves to regulate consumption and, thus, comprises failings thereabout.

The truth is that the State is a conspiracy designed not only to exploit, but above all to corrupt its citizens… Henceforth, I shall never serve any government anywhere.

Thanks for the quotes I'm just sharing analysis on the coin.

[sonofacoin]

Here is a daily chart showing how strong this falling channel is:

[piike2323]

So basically if I ignore everything said and just focus on one point i can amuse by this time next year the bitcoin price will be between $86 and $260. Those prices would still make many people wealth if the damn difficulty didn't rise so high so fast this year. I would have been wealthy if my home miners didn't become obsolete so fast.

[sonofacoin]

So basically if I ignore everything said and just focus on one point i can amuse by this time next year the bitcoin price will be between $86 and $260. Those prices would still make many people wealth if the damn difficulty didn't rise so high so fast this year. I would have been wealthy if my home miners didn't become obsolete so fast.

So that's the reason why I wanted to share some technical analysis. Difficulty versus price.

Bitcoin is much alike Gold in so many ways. And mining is one of them. Need to invest hard to gain hard. Difficulty levels makes it impossible for people without the hardware to mine anything while being profitable.

But Bitcoin trades much like any stock... in fact, I would say Bitcoin is now a little more predictable than most stocks. The reason, it trades mostly on algorithms and patterns. There is no Downgrade or Upgrade by a firm (that I know) that moves bitcoin's price.

So there is trading. You'd be surprised how many people trade bitcoin.

I don't see the end of Bitcoin like a lot of people are trying to tell you. But I don't hoard bitcoins. But I do save a coin or two.

I think we may be nearing a bottom based on the technicals. I bought some yesterday through CoinBase, and I will add more if it starts going to the levels I mentioned above.

GL

[sonofacoin]

Bitcoin price update below

Today's price action has actually moved MACD above for a BUY signal. Circled in red on the middle chart

If this week closes like it, I would be a bigger buyer.

In fact, I would probably add a coin or two at this position.

[sonofacoin]

LOL

[boraf]

TA simply doesn't work on bitcoin. Trend trading might work for a while.

[sonofacoin]

TA simply doesn't work on bitcoin. Trend trading might work for a while.

Tell that to all the traders.

In fact, I think that bitcoin can be more predictable than stocks.

[aronnov]

current inventory of bitocin market is increasing due to the massive selloff in the Chinese nation, so the possibilities for bitcoin exchange prices in the world market will increasingly fluctuating, hopefully it is fleeting ... 

[sonofacoin]

current inventory of bitocin market is increasing due to the massive selloff in the Chinese nation, so the possibilities for bitcoin exchange prices in the world market will increasingly fluctuating, hopefully it is fleeting ... 

Interesting, do you have any links to look at these volumes?

These are the kind of news that can bring the coin lower.

BTW, BTC heading to $400 here in a day or two. Will update as needed.

[cyberpinoy]

As a retired Forex trader who specialized in commodities you must first realize there is no possible technical or fundamental analysis that can be done in the crypto world right now. An analysis in Forex is completed by data that is represented by a factual demand re-occurring every year or month at the same time in addition to news events that trigger a rush of buys or sells in a specific market. Every year at the same time something happens in a fiat currency that moves its price, also every month at the same time something happens where a demand is created for a fiat currency by another country that enables the ability to create good standing analysis of a fiat currency. At the present moment there is no true demand for Bitcoin or any cryupto curtrency, there is no re-occurring events that would lead anyone to make a good analysis that would be a tool used in trading the currency. No one needs to trade their cash for Bitcoins because they have to buy something from someone or another country that would lead to the demand for the coins. Crypto markets are nothing like Forex markets. In Crypto its just a guessing game and a little luck to get in on a deal at the right time. Its nothing like the Forex market where an educated  and informed trade can be attempted from news and past history market movements.

However your setup was very professionally put together.

[sonofacoin]

Thanks cyberpinoy

I agree with pretty much everything you said about comparing crypto to fiat. There's really no country thats currently dependent on Bitcoin to survive, so there is no demand, and there is no need for it for economical growth for any country or entity. So to invest on it or trade it is pretty much up as a guess.

However I do think Bitcoin offers a solution to a world problem.

But let's set that aside.

The reason I am applying TA as would do a day trader or market investor is because Bitcoin has traded following these patterns. I agree Crypto markets re nothing like forex markets. But I know there are thousands of peoples trading bitcoin. Possibly ten's or hundreds who knows. And these are Traders, real ones. And these guys are not glued to theirs screens all the time. They trade with algorithms and software. And these follow market like patterns, sell alerts, buy alerts. And this is why I mentioned I think Bitcoin is and may get more predictable, until it is not of course.

A lie that everyone repeats and holds becomes the truth. A pattern that everyone uses becomes a trend, and viceversa.

Thanks again for your comments. And please feel free to add as I would really benefit from tips and help from a knowledgeable person like yourself.

BTW, Bitcoin price at time of posting was $380 with a top at $394 Bitstamp. I mentioned Bitcoin was heading towards $400, I was shy $6 USD. But the chart still shows and up trend so we may break that.

[Mainbrain]

it's technical analysis or market analysis.?

[sonofacoin]

it's technical analysis or market analysis.?

technical analysis... Market would be too complicated.. The chart price, volume is form Bitstamp.



Good news is Bitcoin is still range bound. It will be a very interesting December.

0.764 holding it nice.

Bearish SAR points are been wasted here as the coin goes up in price. This may signal a bullish sentiment.

[Possum577]

This is the best BTC technical analysis I've seen on this forum site, well done!

A few questions:

1) Wouldn't it be best to compare BTC to fiat (rather than gold) due to it's use as currency in addition to an investment?

2) Do you think long term use of BTC will trend toward investment rather than medium of exchange given the barriers of entry for some new user of BTC? E.g., a new user has to exchange fiat for BTC and the use it for goods and services, which is a pain and convoluted especially when a new user may have trouble understanding the purpose or benefit of using BTC in the first place.

Perhaps BTC will become more of an investment, which would be quite cool.

If you need help publishing your analysis on a weekly basis I can help arrange the right web design and hosting, PM me.

[sonofacoin]

Thanks POSSUM577!

1) I personally think that is it both... A fiat type and a Gold type... Gold, Just because we assign value to bitcoin based on demand, rarity, difficulty to create or extract. And Fiat because it is a means of payment backed by the miners...

But Bitcoin is also a system: Bitcoin itself is the method of paying or sending money to someone, bitcoin is also the method of using that money sent to buy things... and Bitcoin stores value and one can say it is an investment.

One interesting note is that Bitcoin Peaked when it touched Gold price. 1oz of Gold was worth 1BTC.. A huge accomplishment by the Bitcoin community.... I think hat is when people thought Bitcoin is not worth more than an ounce of gold.. and they woke up from this frenzy and said, enough.. I'm selling.. And that created a snow ball effect.

2) For Bitcoin to be an investment... it needs to appreciate in value.. and we know Volume (coins purchased, traded, stored, etc.) is what will make that happen. In order to have volume, we need to solve the issues you described above. The need for this redundant steps to get Bitcoin.


I personally see it as an investment, I don't go out purchasing stuff with Bitcoin, I have had but not anymore. I am very long on Bitcoin. I will start using it to purchase when we touch $1000 again. But once we hit that target who knows... we may see higher prices.

Our generation is smart. Mobile payments are coming. They will be how we do business. Younger generations, the High school, elementary school and KG kids will grow knowing mobile payments. There will be no magical wave of a phone or scan of a QR code to get money. For them this would be just the norm. And Bitcoin will be one more way of paying or sending money. They will understand this no problem.

As Bitcoin grabs the attention of millions more.. then the coins will have to spread. Just four years ago you heard of guys mining 1000 Bitcoins in a week. And holding thousands of coins. Now it is rare when you find someone with 10 coins. Most will carry 1 or a faction. This ratio will keep going. People will only have 100 Satoshis or less. So us with full coins will be powerful.

Bitcoin can be divided 10^−8... and every little Satoshi is as important as the whole coin. Every little one can be used as a proof of something...We just need to give it the value to that proof.

Thanks for the offer. Let me think about it. I don't want to impose anything on you and wouldn't want to have you spend money on hosting and web design. I appreciate the offer. If you think there is something of value that we can do, then I am in.

[sonofacoin]

There is a nice trend in the last few days that has cerated a line of support (RED line below).

This may signal the up trend that I described above. My guess is that the chances of heading to $440 are bigger than falling.

Again, we still need MACD confirmation on the weekly.

[sonofacoin]

An update:

The Key price to watch this week is $369. And a +/- 3% range from that price.

MACD weekly confirmed an up trend. Stochastic supports that movement and RSI is heading slowly into a more healthy area above over sold conditions.

With a decent volume Bitcoin can see a good rally here for investors. I would buy right here if you were planning on buying anyways. If you are in the need of cash and needs to sell, I would just give it a week for a good price point.

ON a long term view, Bitcoin can still rally if it stays above the lower blue line, and should rally if it goes above the green line.

[Atdhe]

Thx for the effort for forum with all the pictures.

But I do not think this analysis will overweight fundamentals like flooding of market with seized of BTC's or Paypal going for BTC etc... One of those events can be a trigger for something crazy in both ways. Just my 2 cents.