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.
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 Pay announces iOS iMessage Bitcoin integration plans. Adding payments to iMessages reduces “the friction,” for consumers, says CEO Jeremy Allaire. “There’s a hurdle to have to install a smartphone app so that I can pay my buddy and all the inputting and set up. To do it all within the iMessages app is a lot easier.”
Bitfinex is showing positive signs by issuing its first reimbursement to customers.The company says they will “continue to press forward on all fronts, to expeditiously retire BFX tokens through equity conversion with qualified token holders, raising new capital through equity financing, operating profits, and prudent reductions in contingent liability reserves.”
The G20 Summit held in Hangzhou concluded, amid growing fears that Chinese policymakers will once again devalue the Yuan to maintain economic activity. The comments about more tepid growth could be interpreted as a hint that more aggressive measures will be taken to protect vital interests, namely that further devaluation awaits the Yuan, which will likely stoke increased Bitcoin buying pressure.
Long Term Technical Analysis
The long term BTC chart just keeps getting more bullish by the day! The long term uptrend channel is still holding well, we should see a test of recent highs of $780 if price remains in this channel.
As always, it’s key to keep an eye on the volume. BTC volume is still consolidating and we should see the volume breakout by the end of this year. We should see new highs if the volume breakout happens while BTC is in an up trend.
Long Term Trade Idea
BTC recently broke out of the flag pattern holding the price down. In our last article we mentioned that new long positions should include stop loss triggers around $500.00. Now that BTC has broken out, we suggest setting a tight stop at $590.00. Its best to not set stops at a round number like $600.00 as round numbers often form support. The short term reward for this trade would be $700.00, a retest of recent highs.
Should this breakout be a false breakout, we could see a test of the long term uptrend support, leading to a further drop.
Short Term Trade Idea
We can get a clearer look at the recent breakout if we zoom in on the 4HR chart. We can see that BTC looks to be forming a solid lower trend line while building upward pressure. We believe BTC will break out to the upside, ultimately testing $650.00 in the near term. Should BTC fail to move higher, $600.00 will act as solid support. We believe that taking a Long trade here at $613.00 still provides favorable risk reward of 2:1, if stops where to be set at $590.00.
With Bitfinex avoiding a potential MT.Gox scenario, we still hold a bullish bias on the price of bitcoin. A short position may be too risky this week, and it appears to be a good time to accumulate. The price may continue to fall further, to the $550 area, as selling pressure resumes, but sellers should get exhausted 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.