Bitcoin Price Analysis — Decision Time

, 23 Nov 2016 - Bitcoin Price Analysis

 

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

  • Bitcoin is trading at a near 20% premium in India as the Indian government explores the possibility of curbing gold imports.

  • The Internal Revenue Service is seeking personal data for U.S. Coinbase clients that used the platform between 2013 and 2015.

  • The Chinese Yuan has been devalued to 8 year lows by the PBOC.

Bitcoin Price Analysis Nov 24 2016 1

 

Long Term Technical Analysis

Bitcoin continues its long term uptrend. The price has reached the previous June highs of about $780.00, although there is a MACD bearish divergence on the daily chart. While there has been a higher high, the momentum was weaker than the previous high. This can result in a pullback to support if buyers can't regain control of the momentum. Overall we remain cautiously bullish.

Bitcoin Price Analysis Nov 24 2016 2

 

Long Term Trade Idea

There are two likely scenarios that could play out in the long term. The next daily candle may open with strong momentum, and push past $780, or we could pull back to support at $710.00, and bounce from there. The second scenario presents a better trade opportunity as the entry would be closer to support, and provide a better risk/reward ratio. Entering a trade at the current price is risky as we are in the middle of a wide range ($680.00-$780.00).

Bitcoin Price Analysis Nov 24 2016 3

 

Short Term Trade Idea

Zooming in to the 4hr chart gives us a better idea of what to expect. Of the two possibilities shown on the chart, we see an equal chance of both scenarios playing out as we are in the middle of the $780.00-$680.00 range.

Bitcoin Price Analysis Nov 24 2016 4


Conclusion

We are still in a bullish up trend. Higher highs and higher lows on the daily chart tells us that there is a good chance of further upside. The bearish divergence on the chart could just be temporary. Bulls need to regain control of the momentum in order to see further highs. We should see a clear direction in the coming days, and that direction will result in a large move.

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.