Thorough Bitcoin analysis and the most likely scenario for the cryptocurrency price moves in the near future
In this post, I applied the following tools: fundamental analysis, all-round market view, market balance level, volume profile, graphic analysis, trendline analysis.
Dear friends, the new week has come, and so, it is time to summarize the results and to update trading scenario for the cryptocurrency market benchmark. Well, let’s get down to Bitcoin technical analysis.
If you compare the current BTCUSD situation with the last forecast, you’ll see the following situation:
Just a week ago, I attracted your attention to the strong support zone between 6080 and 6400 and suggested that Bitcoin rate was likely to go towards the zone, where there would start consolidation and a long-term sideways trend.
Finally, in the chart above, it is clear that Bitcoin price has dropped a little deeper than I expected. Bitcoin bears have been steadily moving BTC price down in the red bearish channel. Only the level of June’s low and Keltner channel’s balance line managed to stop its falling down.
In the end, the market has been consolidating for quite long time. Many expect the previous pattern to repeat, when the accumulation was followed by the continued correction (highlighted in the chart above).
Will Bitcoin price continue moving down? Let’s try to find out together.
Traditionally, I start with analyzing the news back ground and possible fundamental reasons for the drop. But having analyzed all the events around the cryptocurrency market, I haven’t found any more or less clear reasons for such a deep drop.
Moreover, I don’t see any obvious reasons for the BTC USD drawdown lower than the current prices. The entire negative is already included into the price, including the SEC negative decision on ETF. In addition, until September 30 (new data of discussing the ETF matter), manipulators have plenty of time to speculate on this issue.
I won’t be surprised if more fake news, suggesting that SEC got an early acceptance of ETF and then has canceled it, appear before the official date.
The market is still very manipulative. The last Bitcoin rise by 400 USD up to 6456 USD alone is enough. The surge was so unexpected and painful for bears that even cryptocurrency media were talking about it.
In the BTCUSD price chart above, I marked that surge, crucial for many bitcoin bears, with red.
However, to be fair, I should note that there were more than one or two of such surges. During the whole consolidation since August 9, we see bars of 200 USD-300 USD in Bitcoin 15M timeframe.
Big traders are systematically shaking smaller ones out of the market, drawing their deposits in both sides. It is easy to guess that it is a kind of preparation for Bitcoin strong momentum. Unfortunately, the fact alone doesn’t suggest in which direction the momentum will be.
According to the chart above, the moves of the recent week ideally fit general order of cycles. You see, Keltner channel is getting narrower by each bar, leaving less and less room to move. The indicator’s bottom border serves as the strong support.
MACD oscillator in the weekly chart is still in the buy zone, though it is about to go down and send a sell signal.
RSI stochastic is in a neutral state, right in the center of the indicator window. I can’t interpret this sate definitely. The indicator suggests following the further events.
In Bitcoin 1D chart, it is clear that the market, slowly but steadily, is forming the bottom of the global super-cycle. According to this logic, the next Bitcoin price rise won’t be higher than 8000 USD.
Continuing this idea and projecting the bearish trend into future, one of the global BTCUSD scenarios may be an emerging giant Cup and Handle pattern (see the chart below).
The situation in the chart ideally matches to analysts statements that ETF won’t be introduced before March, 2019. Even with such an approximate calculation as our chart, it is clear that the base for the price growth is in the zone of spring months.
For a while, this scenario for BTCUSD is the most likely; but you should understand that the current situation can quickly change and the view on the market can radically transform. So, take this scenario into account, but it shouldn’t be the single possible one that you consider.
If you look closer, you’ll see that the last bullish momentum became a real torture for bears. Even in BTCUSD one-day chart, this behaviour is indicated by the rounding in oscillators; and, taking into account that they are at the channel’s bottom border, you'll easily see a bullish correction towards 6800 – 6900. Bitcoin price will hardly move higher. The obstacle is created by the trendline and the trading channel’s border at around 6850.
Considering Bitcoin recent price moves, my updated BTCUSD trading scenario is like this:
The drop down to 6000 broke the emerging bullish reversal pattern. Now, I am more confident that there is a global sideways trend, and Bitcoin will hardly exit it before the first quarter of 2019.
Taking into account the recent moves in the hourly charts, we can count on a short-term price rise; however, it is still likely to be followed by another downtrend and the retest of lows. The current support levels have proved their importance, and the fact that they are close to each other provide the needed volume of buy orders. Inside the nearest cycle, I don’t think there will a drawdown lower than 5700 USD.
That is my BTCUSD scenario. Let’s go on following the rate and stay informed.
I wish you good luck and good profits!
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Price chart of BTCUSD in real time mode
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