Bitcoin/USD — Full analysis
In this brief article I will analyze Bitcoin price, using basic Fundamental and Technical Analysis. Based on available information I came to conclusion that we have several possible scenarios. You might automatically assume that bearish scenario is a worst-case scenario, however that’s not what my analysis says. Read this article till the end if you want to know what is waiting for us this summer.
Current market situation:
Since January, Bitcoin was moving sideways, forming symmetrical triangle (Continuation pattern). So far, we have several converging lines. The bottom(support) line moves through $7200 price level. Line on the top is forming $9000 resistance level. Let’s see what will happen if Bitcoin will move below or over these lines, and which scenarios is more likely to happen.
1.Bull marketscenario.
If we want BTC to enter new rising trend, then bulls should accumulate enough large impulse to bounce over $9000. It is a trend line which forms triangle. It might not happen immediately, as triangle is still converging. What does it mean? It means that we still might see couple price bounces within $7200 — $8650 range before price will move over $9000 (or below $7200). If Bitcoin will pass over $9000 it will meet significant resistance at $9500, $10000, and $11500 — $12000. In order to form rising trend, bulls should prevent BTC from falling below 8200–8600 range and only then we can celebrate Bitcoin recovery.
Summary: When Bitcoin moves over $9000, bulls should be able to reach at least $10,000 line, but their major task is to keep the price from falling below newly formed trend line (which would be in a range of 8200–8600)
2. Bearish scenario
Movement below support line (1D chart) of symmetrical triangle (Green, rising support line) will trigger bear sentiments on the market. As a result, I expect price to move at 6900–6500 level (which is also 60% Fibonacci level). I set my buy order at $6780 USD. From there, bulls can form strong buy impulse which will bring BTC back to $8600 — $9000. However, if bulls will fail to move over 7600, then I would expect further bearish movement to the next tested support line: $5900. I don’t see price going significantly below $5900 due to various indicators, therefore I wouldn’t try to “catch the bottom”. Yet, at the end, we should still witness serious price bounce from $5900-$6100 levels.
3. Sideways
In my opinion, this is a worst-case scenario. Why? Bearish scenario would mean market recovery as Bitcoin will be heavily undervalued and oversold at $5900,triggering new bull impulse, similar to September and August recoveries. With continuation of sideways movement we will just postpone inevitable. Uncertainty over the market will slowly decrease hype around crypto and will slowly poison investor’s interests. The only worse scenario, I can think of, would be entering sideways period after falling below $7100, as it might form another flat range at $5500 — $7200. I hope that this will not happen
News environment: Neutral.
Overall market has balanced presence of positive and negative news. Majority of negative news are related either to Bitcoin criticism from traditional market analysts or legal issues with ICO’s. None of these news have any direct or straight relation to Bitcoin performance, technology or adoption. Example: US Department of Justice Bitcoin price manipulation investigation.
Positive news: There are several good and positive news, including growing Bitcoin adoption in several countries, endorsement of Bitcoin by public figures and celebrities. Example: “Twitter CEO Jack Dorsey Hopes That Bitcoin Will Be the Future Internet Currency” or John McAfee’s prediction that Bitcoin will Surpass $15000 next month.
Summary: None of these events have enough power to shift market mood, therefore I consider market mood as overall neutral
Additional indicators:
1.MACD: shows increasing divergence. Indicates further bear market
- Stochastic: Oversold at 5. Yet, we sill have space for fall
- RSI: Close to oversold (34), yet we still have space for downward movement
- Momentum: Still bearish, no bullish indicators
- Volume-Flow Indicator: Still bearish as it stays below “zero” line”.
Summary: TA and indicators show that there are no strong reversal signs, therefore I think that bearish scenario is the most likely at this moment. If there would be no significant news or events that can shift the market mood, I will keep my money in USDT till I see positive signals
by Vladyslav Antonov