Bitcoin price analysis — A slow week in bitcoin

, 06 Oct 2016 - AnalysisBitcoinPrice


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

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

This section is an overview of news headlines or events that may affect BTCUSD.

  • Blockstream has successfully tested the Bitcoin Lightening network. The Network tackles bitcoin scaling issues. It’s one of the first implementations of a multi-party Smart Contract using bitcoin's built-in scripting.

  • Needham, an investment and asset management firm increased their price target for Bitcoin from $655. to $848, praising the Bitcoin Core Scaling Roadmap.

Long Term Outlook

 

bitcoin price analysis Oct 5 2016 1

This week's chart shows little change from last week. The price has broken out of its $590-$610 range, making consistent higher highs and lows on the daily chart, which is a solid bullish signal. The inverse head and shoulders pattern also supports a bullish outlook, while price consolidates in the lower part of the trend line. It's important that overall volume remains strong which is a good sign that price should advance to the upside once sellers get exhausted.

Long Term Trade Idea

 

bitcoin price analysis Oct 5 2016 2

Now that we’ve broken out of the $590-610 range, there is a favorable risk reward ratio for buying into the market at the price ~$610. $600 would make an appropriate stop loss, as it’s  the lower trend line support. Should the price test and break below $600.00 dollars in the coming days, a panic sell off down to $560 is likely in the near term. Although that situation is unlikely, it’s important to note.

Short Term Trade Idea

 

bitcoin price analysis Oct 5 2016 3

The short term chart shows that price break, and consolidation, above the 50% Fibonacci level of $610. The price needs to hold above this level to see further gains to the upside. The next resistance level is $650-$660, support is $570.00 in the near.

Conclusion

 

The long term chart shows several bullish signals, and a push higher is likely. Fundamental indicators also appear positive, with scaling solutions on the horizon.

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.