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Bitcoin Price Analysis — Bullish consolidation

Price has remained in the long term uptrend and we remain bullish. There may be a pullback in the short term, to $750, before heading back up to new highs, above $850.00. Momentum has been in consolidation and should break out soon.

The technical setups posted below use simple trend detection, support and resistance, channels, pattern and candlestick analysis. We aim for high-probability trade setups on BTCUSD and use very few indicators. All charts use BNC’s Bitcoin Liquid Index for maximum accuracy.

The timeframe for trades is 1 to 7 days, so we’ll use 4h candlesticks. Bitcoin is best traded as a purely speculative commodity on 4h+ timeframes.

Market Sentiment And Macro Key Points

  • Circle decides to pivot away from allowing consumers to purchase Bitcoin from their platform. Bitcoin isn’t totally gone from Circle, Bitcoin will still be the platform’s settlement token.

  • The Winklevoss Bitcoin ETF sparked some more interest when coin-etf showed up on the web overnight. This sparked some speculation that the SEC may be nearing an approval on the rule change

  • Several mainstream news outlets have published bullish articles this week calling for $2000+ Bitcoin, including Fortune, Investopedia, CNBC and others.

Long Term Technical Analysis

The long term uptrend remains intact. Bitcoin broke above the .382 Fibonacci level ($750.00) and retested it, which is a bullish confirmation that the price wants to continue rising. Meanwhile the MACD momentum oscillator showing signs of exhaustion, which indicates that we may be in for a reversal, although it can also indicate that the momentum is consolidating prior to another break higher. Any significant dips in the coming days might present good buying opportunities.

Bitcoin Price Analysis 9 Dec 2016 1

Long Term Trade Idea

The price structure looks to be in an ascending wedge, presenting two scenarios. The first would be a breakout to the upside with a target of $850.00 or a test of the upper trend line. The second would be a breakdown to the .236 Fibbonacci level ($720.00). Volume has also been in consolidation, indicating that we should see larger movements in the coming weeks.

Bitcoin Price Analysis 9 Dec 2016 2

Short Term Trade Idea

Zooming in to the 4hr chart gives us a better idea of what to expect. Price attempted to break $775.00 resistance and failed. There is a favorable chance of a pullback to $750.00 which would present a good buying opportunity to go long. A break below $750.00 may result in further pullback to the next support level at $720.00.

Bitcoin Price Analysis 9 Dec 2016 3

Conclusion

Price has remained in the long term uptrend and we remain bullish. There may be a pullback in the short term, to $750, before heading back up to new highs, above $850.00. Momentum has been in consolidation and should break out soon.

Disclaimer: The information presented in this article is general information only. Information provided on, and available from, this website does not constitute any investment recommendation.

Nathaniel Freire is a full time day trader trading Digital Assets, Forex and Stocks. Based in New Jersey, Nathaniel specializes in technical analysis with a twist of social sentiment and fundamental analysis. You can follow Nathaniel on Twitter @Cryptocoinrun


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