Bitcoin Price Analysis — Long term buy, short term hold

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.

• BitFinex to generalise losses across all accounts. The recent theft of 120,000 BTC will results in a 36% haircut for all users when the exchange grants access to accounts.

• The United States Marshals Service is set to auction off 2700 Bitcoin. The auction on 22 August involves cyrptocurrency connected with "various federal criminal, civil and administrative cases," says the Marshals Service.

Long Term Technical Analysis

BTC is still in its long term uptrend channel, even after the BitFinex attack. The above chart outlines the long term channel. The uptrend held well in the BitFinex selloff and BTC is currently priced at $589.90.

Long Term Trade Idea

If the channel continues to hold, we will see a re-test of recent highs of $780.00 soon. A good long entry would be in the $580-$560 area – lower part of up-trend channel – with a stop loss set below $550.

Short Term Technical Analysis

In the short term time frame it looks like BTC could be forming a bull flag. Despite a strong vertical rally, bitcoin refuses to drop appreciably as bulls buy in. The breakout from a flag often results in a powerful move higher

Short Term Trade Idea

Following the long term trend, BTC will most likely test the upper line of the bull flag and eventually break out. This may take longer than a week, as the price needs more time to consolidate after this recent sell off.

Conclusion

After the BitFinex selloff, BTC is looking good for more upside. BTC will need some time to consolidate before attempting a move higher. By using the long lasting up-trend lines, there is a good opportunity for a long entry in the $580.00 to $550.00 range.

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.