Another quick overview of Bitcoin and possible price direction. One thing we must bear in mind is whether there are still bullish undertones to the whole market. We must not forget the halving of Bitcoin to come; this video discusses that briefly. This video is strictly for educational purposes. It is not a video giving any financial advice as the maker of this video is not authorized to do so. This video is not an endorsement of Bitcoin for purchase.
With the recent turmoil in the financial markets, several people have asked, Is there a correlation between the price of Bitcoin and the S&P 500? This short video answers the question.
Some time ago, I put forward an argument about Bitcoin hitting the $6500 mark. I wrote about it in a blog titled "Bitcoin: Brace for Another Price Fall" on the 18th of September. I have brought this up because of what I wrote on that day. The graph below will illustrate this point perfectly. As is seen, the $9532 price level is supported. That support was tested four times before the eventual price fall. A support or resistance level tested three or four times almost always signals a fall or rise in price.
In this case, might we assume the same is about to happen once more? I ask you once more to observe the graph below:
Bitcoin price is in consolidation with the $6616 level tested twice already. Let us not forget that volatility is quite mild considering as you can see on with the Bollinger Bands. The price trend is also weakly-bullish as the price is beneath the Cloud and the Chikou Span entangled with the price. This entanglement means that the price levels are acting as a resistance to the overall trend. Besides, the Chikou Span is considered bearish as it is below the price of 26 days ago.
The reasons above indicate that the $6616 price will be tested again. If a test occurs for the third and fourth time, we may see a drop in price to levels such as $5500. As to what price we should expect, your guess is as good as mine.
This is another very quick video with a few thoughts as to what is happening in the world of Bitcoin. Please check my previous blog pieces for discussion on why $6500 is still possible.
This is just a very short video discussing the price of Bitcoin. I have done several pieces in the past discussing the very topic of Bitcoin price possibly falling to $6500. For those who have not read of them, here are the links:
Bitcoin: Next Stop $6500?
Bitcoin: Road to $6500 Still On?
Bitcoin: Is This the Bottom Before the Rise?
The video that follows simply echos the point by pointing out what the market is saying today. Enjoy!
I must admit that I should have written this piece over a week ago but didn’t. Bitcoin has once again stunned many people with its surprise move a little while ago. I began to wonder if the price had bottomed out. This could only mean one thing, a look at the charts. Many of you may recall that I have mentioned looking at the higher timeframe charts, in this case, the weekly charts with the assistance of some moving averages.
A look at the BTC: USD weekly chart from Bitfinex indicates that there is a high probability that Bitcoin has bottomed. The reason for this is that Bitcoin’s last two weekly prices ranges closed above the 21-weekly EMA (Exponential Moving Average). So far this week has closed above the 21-weekly EMA. As I have said in the past once price closes above the 21-weekly average on two consecutive occasions, then it is most likely that the price will rise. The second condition is for price to stay above the prior low which was $7333.40. If these two conditions are maintained then this means that the buyers and bulls are in control.
We must not fail to mention that the price is also above the 55-weekly moving average. Falling below this average means falling below the previous low. If this happens, then the bears and sellers are in control, which could mean a price fall. Bitcoin volatility comes as no surprise hence, massive price rises and falls. No one can say when and how this will happen but then your guess is as good as mine.
Considering what has been happening in the world of crypto, you can say this has come about a week too late. You will be right to say so as I have spent the last few weeks promoting my new book. I apologise to my regular readers and hope to get back to publishing more often. With that out of the way, let’s get back to discussing Bitcoin. In late September, I wrote about how I believed Bitcoin falls to $6500 (please see the blog piece here if you’ve not read it). I have not changed my view as of yet.
Once again I refer you to the BTCUSD weekly chart with the EMA 21 & 55 as overlays. We see that the closing prices over the last 3 weeks are below the 21-weekly EMA. It is likely to continue. The chart also shows that the price just above the 55-weekly EMA. The volume profile chart overlay also reveals that there is activity at the $8325 and $6689 levels.
A glance at the BTCUSD daily chart shows that the 21-day EMA is below the 55-day EMA. Some may view my reasons as too simple but as I said, I am only stating that nothing has changed. I could get intellectual about it but then again, your guess is as good as mine.
I said in my blog of 18 September that if Bitcoin breaks the $9100 level, we should expect it to fall to $8000. The $8000 level was also broken falling at one point to $7820. Currently, the price is hovering between $7974 - $8171. There are some indications that there is a bit of a fightback by the bulls. They don't seem to be getting far with their endeavour. Nevertheless, the question remains, is $6500 possible? Simple answer, yes.
To see why we must look at just two things. First, let us look at the weekly Bitcoin price. Second, Bitcoin's volume profile. For those who have no idea what volume profile is, here is a short explanation. Volume profile is an advanced charting study that displays trading activity over a specified period at specified price levels. The study plots a histogram on the chart meant to reveal dominant or significant price levels based on volume. Unfortunately, discussing volume profile in full is beyond the scope of this blog piece.
Combining both the volume profile and Bitcoin weekly prices is seen in the chart above. There is a clear indication that there is volume activity at around the $6500 levels. The next level of support for Bitcoin is $7500. If breached, $6500 is certainly possible. Public commentary on Bitcoin has become ridiculous in many cases. I will ignore giving examples as they are too numerous to mention. I may remind everyone of the following - "You can't trade the market you want only the one in front of you". We must stick to this simple principle and make our decisions from that. And as to where the market wants to go, your guess is as good as mine.
Bitcoin Volume Profile and Weekly Price courtesy of GoCharting
The cryptocurrency market is probably one of the most confusing and frustrating markets ever in existence. This has been further exacerbated by the presence of social media. Social media is not necessarily a bad thing. We now have sentimental analysis in full swing due to social media. One example is Twitter. This platform can inform an investor/speculator information as to what to expect from a particular asset. This very same media platform is also full of rumours and of course false information. This is why I would rather study the charts and ignore the chatter. Social chatter on Bitcoin is particularly infuriating. Case in point, Bitcoin is dead articles.
Getting back to Bitcoin, we all have observed that it has been in a consolidation pattern. Price volatility has not been too bad. I am sure those using Bollinger bands can bear witness to that. Looking at the BTC charts, we realise that price has tested support several times over the last few months. That support is at $9352 level. Remember the more times price tests a key level, the more likely it will be broken. As seen on the chart, if Bitcoin tests this key level, it will be the fourth time and may well breakthrough. If this level is broken, and price falls to $9083, expect the price to fall to the $8000 level.
You must remember that you are not alone in observing price movements, others are seeing the same patterns. Traders in long positions may well feel that the BTC price may well drop below support. The more insecure they feel, the more they are likely to sell their positions. We must not fail to mention those on the sidelines, in other words, those not in the market but observing. For them, an opportunity to sell into the market may have presented itself. They are likely to sell short. This will put even more selling pressure on the price of Bitcoin.
Having said that, nothing is stopping the price hitting $12000. We cannot underestimate that possibility. As I have often joked in the past, all it takes is Vitalik Buterin changing the colour of his underwear and the price goes up. I have admitted that things have since changed from such days. The crypto market is still fickle and could change suddenly with no warning. And as to where the price is heading, your guess is as good as mine.
The price of BTC has confused a lot of people and the noise put out there called commentary or should we say analysis is no clearer as to the direction it might take. Even though I could write more regularly in this regard, I tend to watch the price activity for a little while before saying anything. Rather than complicating matters, I decided simpler metrics should come into play.
BTC Price & the 21-weekly Exponential Moving Average Courtesy Tradingview.com
Looking at the BTC weekly chart you will see that price is still above the 21-weekly exponential moving average. On the week starting 14 July, the price of Bitcoin fell to $9090.4 just over $1000 off the 21-weekly EMA. The current price is now at $10376.2 (at the time of writing). As long the BTC price does not break support at the 21-weekly EMA then we are not in a bearish market. Should it do so, then we are heading into a bearish market with a potential drop to between $6000 - $7000. A drop to this level means breaking support at $6747 – 55-weekly EMA – and potentially a fall to $5000.
Could this possibly happen? Maybe, but as none of us really know what exactly, your guess is as good as mine.
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