Bitcoin seems to be holding quite well and in fact gaining a bit of ground since the introduction of the futures market. Will these gains hold? In the long run I believe they will. In the short term, the next few weeks etc. I’m not so sure. What I do know is that the charts have to be honored. Prior to the speculative bump at exactly 5:30 p.m. yesterday to coincide with the introduction of the futures market Bitcoin was trending down towards a natural correction. It was doing exactly what it was supposed to do and honoring the metrics of the chart which on the 12 hour, 1 Day, 3 Day and 1 Week showed divergence between the MACD and signal, a decreasing histogram and overbought conditions on the StochRSI.
Some of the imbalance in the indicators, specifically the 12 hour was smoothed out during the fight for $13,000 the day prior. The sell off during that period showed that Bitcoin has huge support in the $13,000 zone as it was tested numerous times during the night and failed to break. The resulting bullish momentum from the successful defense resulted in a run up that did not appear destined to last until it received the bump from the futures speculators. If you look at the charts directly prior to the introduction of futures you can see that BTC was trending down and on the verge of another slide to test $14,000 then $13,000.
What I expect to happen is likely a further run up, followed by some consolidation and sideways trading. There are two ways that Bitcoin can honor the indicators and remove the upside divergence that could pull it down. The first is an obvious sell off and correction which will bring the MACD/Signal line together. In the event this occurs BTC will gain downward momentum on the indicators and will pass the balance point and end up with a negative divergence that will serve to add momentum on the way back up. The other way that the indicator can be honored is significant time sideways trading in a range to allow the moving averages to begin catching up and the indicators time to smooth out. In the event that the latter occurs expect Bitcoin to trend up and down from $14,500 to $17,000 over a period of weeks.
As it stands at this moment, the 1 day chart looks a bit more Bullish, not a tremendous amount of divergence and the RSI is placing us at oversold condition. As the indicators do not agree in entirety I have to look toward volume which is again bullish.
As I go further out to the 3 day and 1 week, the picture gets a bit more bearish in regards to divergence and being in an extreme overbought condition.
Today I would expect more of the same, expect Bitcoin to continue trending up, with minor corrections here and there. What I am watching is the 4,6,12 hour time frames on the MACD
ETH @ $469
I see ETH as a buy, I don’t expect it to break any records today, but maybe with the current health of the market I can certainly see it trending upwards throughout the day. I would not be surprised to see $500 today, most likely the high $400’s. I say buy, hold, set a stop.. If you can set a trailing stop all the better. Either way expect a move in ETH after Litecoin.
********I want to add to this (AND THIS IS IMPORTANT) the 1 day MACD just went GREEN for ETH for the first time since November 28th. This is indicative of an extreme price run up in the works. The last time the indicator went GREEN Ethereum was $294 or 38 percent ago. A similar run up would put us at $640-$650. So I could even see myself picking up some ETH to HODL with a stop at $450 which I will move up as the price goes up. ******
Litecoin at $165
I see Litecoin as a major buying opportunity. Litecoin buyers are still hungry, from all these highs and run ups. The most recent mini correction did little to dissuade buyers and all the metrics on the MACD point to an extreme buying opportunity. I will be in LTC today.
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