Bitcoin (BTC) Price Analysis – Layered with Uncertainty, Investor Nervousness is Palpable
Bitcoin (BTC) Analysis
Bitcoin’s overall price direction is currently layered with uncertainty, the nervousness of investors palpable. Many people already under water in early November, hoping the $6000 level would hold. With the subsequent 50% drop in Dollar value, the pain only increased.
Bitcoin found a temporary bottom at $3122 (BITSTAMP) and then had a rally to $4236 – The mood was positive but the up move ran out of Volume, Bitcoin failed to make a higher high and now finds itself in a Range between these two figures.
BTC / USD Daily Chart – BitStamp
After the up move, we retraced to the 50 Fib, rallied to the 23.6 Fib and then came down to the 61.8 – A standard retracement move
The indicators are quite flat and not telling us much other than there is a period of consolidation.
The blue boxes represent areas of support and resistance. These are likely the next areas to be visited.
Let’s look at the 4 Hour chart to gauge the direction
BTC / USD 4HR Chart – BitStamp
On the lower time frame, we can see that price is indeed in a period of consolidation.
The break out could go either way – I’ve marked the initial targets for each outcome.
If we break down, it’ll bring us to the 78.6 retracement which could see a renewed rally to test the highs of the range
Overall, I’m currently neutral until we see a break of this range. In the meantime, for investors, it’s probably best to sit on your hands and wait. Traders can look for scalping opportunities such as the break out play above.
One idea I’m watching is this Wyckoff bottom/reversal pattern. A loose, longer-term outlook and shouldn’t be traded on, but something to keep in mind. If this were to play out, I would personally jump in with a Spot position at the ‘Test’ phase.
Disclaimer: Authors views and analysis are not meant to be investment advice. All trading is risky.