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Bitcoin Price Analysis – Volatility in sight

Volume broke out of its long term consolidation two weeks ago and has remained consistent since which is a great sign for some volatility to come.

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

  • Fed indicates US rate high is likely this year. Although the fed decided to keep interest rates at .25%, they indicated that a rate hike is likely to occur this year. It is speculated that if a rate hike where to occur, US stocks and the US dollar would suffer.

  • A judge in Florida ruled in a money-laundering case in July that bitcoin is not money. However, U.S. District Judge Alison Nathan in Manhattan ruled on Monday that bitcoin was indeed to be treated as money in a decision linked to a criminal case over hacking attacks against JPMorgan Chase & Co and other companies.

  • The U.S based digital-asset exchange, Gemini Trust Co. announced on Wednesday the launch of the first-ever daily bitcoin auctions. The next BTC/USD auction will occur at 4:00 p.m. Eastern Time on Sept. 22.

  • BOJ introduces rate target for 10 year government bonds and keeps it’s key interest rate steady at 0.1%. As the BTC/JYP trading pair has in recent months surpassed the USD trading market in volume and risen to 2nd place (after BTC/CNY), many traders are looking for signs of correlation between news out of the BOJ and the price of Bitcoin.

Long Term Technical Analysis

Bitcoin Price analysis 22nd September 2016 1

The long term view chart still looks to be in great shape. We are hovering in the lower part of the up trend channel which means that we should have a move to the upside in the near future.

Volume broke out of its long term consolidation two weeks ago and has remained consistent since which is a great sign for some volatility to come.

Long Term Trade Idea

Bitcoin Price analysis 22nd September 2016 2

Last week, we mentioned that BTC had a strong probability of retracing into our target buy zone. We believe BTC will retrace a bit further from its current price of $596 to ultimately test the $575.00 support level where we feel that BTC will be a great buying opportunity.

We do not see any high probability trades to enter this week as we are in the middle of the last 3 week range. We see a high probability chance of a sideways battle between bulls and bears in the $600.00 to $575.00 range.  Overall we remain bullish as all indicators and patterns point towards a strong push towards the end of this month to mid next month.

Short Term Trade Idea

Bitcoin Price analysis 22nd September 2016 3

If we zoom into the 4hr chart, we can see a potential pattern developing which enforces our short term neutral bias for the remainder of this week going into next week. The pattern above is a Bullish Falling Wedge pattern which has a high probability of resolving to the upside. The above chart suggests a minor pullback to the $580.00 level which corresponds with our long term outlook buy level.

Conclusion

With overall sentiment of Bitcoin mixed and chart beginning to show signs of consolidation, we believe the price of BTC will be in a choppy range going into next week. We should have a busy October as we will be one month closer to SegWit and Lightning Network scaling solutions. Also, let’s not forget about the SEC decision on the Winklevoss Bitcoin ETF on October 12th.

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 Freire specializes in technical analysis with a twist of social sentiment and fundamental analysis. You can follow Nathaniel on Twitter @Cryptocoinrun


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