Analysis for Bitcoin situation from fundamental point of view and a look into the coin’s future for this month.
In this post, I applied the following tools: candlestick analysis, all-round market view, market balance level, trend analysis, oscillators, trading volume.
Another week is over, so it’s time to take the stock, assess the current situation and forecast the future moves for our Old Chap, Bitcoin. Let’s start with analyzing the fundamental factors in the market. The last week wasn’t reach in any important events; however, I identified for myself one highlight that I think to be underestimated by the market and will still affect it for some time. As known, Nasdaq is going to open its own cryptocurrency exchange; and it has become known recently about the exchange’s support of at least three coins, Bitcoin, Litecoin and Stellar.
This news was released on May 29 and we all witnessed a strong momentum that day, which resulted in a bullish trend start. Meanwhile, many are still doubting, whether it was a reversal or not. Maybe, it was just a bullish correction in the bearish market? I believe it to be a perfect reason for the reversal. More and more financial establishments recognize cryptocurrency as an asset and a payment means. Nasdaq engaging in the market, especially as a platform for trading real cryptocurrency, not something virtual, like futures, suggests that really big money of institutional investors should flow into the industry soon. In fact, it is an inevitable process already; cryptocurrency stops being a kind of lottery ticket, rather, it becomes a kind of venture investment and assets, integrated into the global financial system.
On the other hand, it is clear that the market needs some time to completely get over the depression. Bitcoin’s dramatic crash from 20,000 USD down to 6000 USD is still puts a psychological pressure on the market. To estimate this influence, based on technical analysis, let’s study the situation in the chart.
Traditionally, let’s start with analyzing Bitcoin’s monthly timeframe.
In the chart above, I marked the borders and the centre of Keltner channel with the red lines. The check point is highlighted with red dots. As you see, the ticker met a support at the yellow nine-period moving average and is in limbo, in the top channel’s half. The central line of Keltner channel, which is now at 5891 USD, is the market balance level and is a kind of magnet for all bears.
If the price consolidates below the yellow moving average, which is now at 7550 USD, the way to the balance moving average will be open. As for candlestick patterns, May features a long black candle (see in the green circle), whose body is bordered by the last, April, candlestick. In general, this state of candlesticks is neutral and suggests uncertainty in the market. The tail of May candlestick broke through the last high, which makes the situation a little bullish. At the same time, trading volume in May candlestick is smaller than it was during the previous three months, which proves the sideways trend and uncertainty.
If we look at the weekly chart, the situation here is not as easy as it is desired. The previous weekly candle closed white against the background of the long black candle. The latter one’s high is not higher than the middle of the bearish candle, which means bears’ weakness. The tail of the white candle is lower than the previous low, which also suggests a bearish signal. The chart itself is in the bottom half of Keltner channel, close to its border at 7000 USD. The new week’s candle will determine the next trend moves. If the candle breaks through the low around 7040, the bearish scenario will be confirmed. In this case the price can well drop even lower, down to 5800. On the other hand, consolidation at 7800 will provide a perfect signal for the bullish sentiment growth.
If we look at the oscillators, they don’t yet inspire any optimism as well. RSI stochastic is in sell zone and is approaching the overbought zone, which, I must admit, won’t prevent the market from dropping deeper. MACD is also in bearish zone and hasn’t yet shown any signs of reversal.
If we look at the daily timeframe, the situation here also looks rather bearish. We have witnessed a kind of a rising wedge for six days in a row. This situation still looks like a technical correction inside the bearish trend. The ticker has reached Keltner channel balance level, but is featuring the price rebound within the current bar. This rebound provides an opportunity to go down to 7440 USD during the day; and to 7000 USD – within the week. The bearish scenario will be canceled if the market gets a momentum and consolidates above 7800.
If we look at the market down the microscope, the ticker has just broken through the rising wedge and returned to the ascending channel, where the key support is the zone between 7400 – 7500. Here, there is quite a lot of bullish sentiment: lower channel’s border, Fibonacci level of 0.764 from the first momentum in the bullish trend, the check point in the vertical volume indicator. The primary bulls’ target is holding up the level. If they succeed, the market will slide into another sideways trend, and based on it, it will be able to move higher.
The BTCUSD is literally on the edge. Cautious steps up can be easily stopped by manipulators’ powerful dump, as it occurred many times previously. The only difference is that it is getting more and more difficult to spread fake news amid the total trend of cryptocurrency legalizing.
So, in the recent times, manipulators don’t create negative reasons, they just press the market by big amounts of money. It is very costly and inefficient, especially amid positive events. So, it is easier for them to stay aside and not to interfere with the market until some negative emerges by itself, for there are enough reasons for that.
Due to the whales’ calm, I don’t expect any sharp swings, either up or down.
Therefore, meanwhile, I’m sticking to a moderate optimistic scenario, when the correction will stop at 7500 with the price rebound from the channel’s bottom border, followed by its modest growth up to 7900. The drop lower than 7500 will open the target at 7025 USD. You shouldn’t think this scenario to be negative, for even so, the ticker will be inside the giant triangle, whose border will be confirmed by another rebound from the level of 7000 USD (I displayed in the chart below).
I wish you good luck and good profits!
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Price chart of BTCUSD in real time mode
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