Bitcoin Chart Analysis 14 July 2017 - Compressing Further Downwards

Hello Fellow Steemers.

Summary

• the correction scenario is moving further. Bitcoin down, but holding up nicely
• playing this out will take more time
• bearish pressures are materialising. Price entry for the brave; the cautious should wait for more confirmation

Introduction

Once in a while, I look at the Bitcoin charts and think of what they are telling me. I leave Bitcoin day trading to others and tend to look at the long(er) view. Below, I share my thoughts on the price developments and the directions that the charts may give. I note that charts and technical indicators do not predict the future; they only show the past. However, they may signal the probability of the next move.

Please note that all charts are logarithmic, meaning that any doubling - for example from $1,000 to $2,000 or from $3,000 to $6,000 - would be shown on a similar scale (i.e. a straight line). This filters away extreme price spikes as appearing from normal charts.

For the previous chart analysis article, see: https://steemit.com/bitcoin/@wekkel/bitcoin-chart-analysis-8-july-2017-a-beautiful-correction

Let's start with the first chart.

1. 12Hrs Chart

12hrs chart (Bitcoinwisdom) - direct link

The Bitcoin 12hrs chart shows that we are in an intermediate downtrend. Short term Moving Average is below the longer term Moving Average, MACD is below the 0 line and the oscillator (KDJ) is bouncing on the bottom (see marked in red). We are looking at a juice red candle as the latest candle.

With lower lows and lower highs nothing to touch at this moment. Let it find a firmer bottom first.

2. Daily Chart

Daily chart (Bitcoinwisdom) - direct link

The Bitcoin daily chart also continues to show the intermediate correction pattern downwards. The oscillator below the chart (KDJ) has found 2 bottoms, but the 2nd is lower than the first one. I therefore do not see it as really tradeable yet. Especially since the price action is weak (short term Moving average below the longer term average and MACD going downwards through the 0 line) with increasingly larger red candles. Let this bottom first because there is a real chance that this slide down will develop in an avalanche. No tears here about a 'crashing' Bitcoin, but taking a position now seems only warranted if part of a dollar cost averaging strategy (i.e., more funds available to do another trade if Bitcoin goes a few steps lower).

3. Three Day Chart

3 day chart (Bitcoinwisdom) - direct link

The 3 day chart shows the KDJ indicator really going to the bottom line. This is healthy, together with the price reaching the longer term moving average. This could be an area of some support. Therefore, similar to what's written at the daily chart, first daredevils or dollar-cost-averaging-investors could take this as a moment to make a first bid. The movement towards $2,200 has materialised and could result in a quick punch through the longer Moving Average to the $2,000-$1,800. described above. As indicated in the last article, this would fit a narrative of increased uncertainty in the Bitcoin scene now that the 1 August 2017 deadline is rapidly approaching.

So I can imagine that one would take a position around this price level, but the sliding type of price decline make me cautious and expecting more weakness. Could be a real spike downwards towards the $1,600 zone sometime soon. So do not waste all your ammunition now.

4. Weekly Chart

Weekly chart (Long View) (Bitcoinwisdom) - direct link

The Weekly chart shows that, compared to recent bottoms in the KDJ indicator, we have not fully bottomed yet on this long term chart. Together with the elements described above, I therefore suggest not to go all in right now. A decline towards $2,000-1,600 - presumably a big fat spike downwards - is quite possible and obviously too delicious to let go, so keep some powder dry.

If going all in, more signs should indicate a bottom. So we want MACD lines to cross/the bars to reach the zero line (not quite there yet) and the KDJ indicator to reach lows comparable to the other lows (or better, a juicy spike downwards. Looking at the longer term Moving Average, no harm done if we get that fat spike towards $1,600 in the wake of the 1 August 2017 resolution. This would probably be one of the 3 to 4 big buy opportunities that Bitcoin offers each year.

And that brings me to the usual last chart.

5. Bullish Long View - Chart

Bullish as Hell (Masterluc's) (Tradingview) - direct link

This chart shows the most bullish projections for a 2017-2019 price spike up to $110k. It is my understanding that the person who made this chart (and maintains it over at Tradingview is the same as masterluc in the infamous 'Analysis never ends' thread over at Bitcointalk. He has been right numerous times in 2013 and he may be right this time.. But this will take a strong HODL attitude.

What we are pondering about in today's article, is probably just a blimp if looking back at this over 5 years.

This is it for now. Happy trading (and HODL-ing).

DISCLAIMER: just sharing ideas, no trading advice. I am long Bitcoin.