Bitcoin Price Analysis — Volume Breakout!

 Nathaniel Freire, 16 Sep 2016 - Analysis, Bitcoin Price, Cryptocurrency                         

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. Customers can send dollars, euro, pound  sterling and bitcoin to anyone directly inside of iMessage, and can fund  payments and cash out using almost any bank in the US, UK and, soon,  Europe. 
  • The race to capture the lion’s share of the ETF market is heating up.  The Winklevoss ETF, once to be listed on NASDAQ, then later to on BATS,  has just had a regulatory setback. SolidX is stepping up their game to  provide a competitive foothold. 
  • Ripple raises $55m in Series B Funding.  Ripple also added new partners to the Ripple network;  Standard  Chartered, Westpac, National Australia Bank, Mizuho Financial Group ,  BMO Financial Group, Siam Commercial Bank and Shanghai Huarui Bank. This  shows that the digital currency industry started by Bitcoin is still  growing. 

Long Term Technical Analysis


Its great to see the long term uptrend channel is still  intact, It’s safe to say that we are still in an uptrend. The very  bullish inverse head and shoulders consolidation pattern is still  forming. Should this pattern complete, we should see new highs this  year.   Something great has happened over the past week, BTC’s  volume broke out of consolidation! We see this as a big deal as heavy  volume is needed in order to take BTC’s price higher. 

Although the price  retraced a bit, this should be a healthy retrace that’s needed if price  is to continue higher. On Balance Volume is at all time highs, this  indicates that buying pressure is still strong and is usually a good  indicator of future price continuation to the upside. 

Long Term Trade Idea


We see a very strong probability of BTC retracing further  in the coming week(s). We view this as a potential long term buying  opportunity.


There  is a high probability of further retracement in the near term as BTC  found strong support at the $615.00 level, which is 50% Fibonacci  support. The next support level is at $575.00, should be a good buying  opportunity. Setting a tight stop loss in case the market does panic may  be beneficial. It may be best to look for a pattern of higher lows and  higher highs if the price does reach the $575.00 level before confirming  an entry. 

Short Term Trade Idea


Short term we see a decent sell opportunity. The retrace  this week, on Sep 9, accompanied heavy volume, Historically retraces of  that magnitude tend to have further continuation. The spot price is  currently $605.00. Shorting now, with a take profit at $575 and stop loss at $615, gives a good risk/reward ratio of 2:1. 

GBTC Bitcoin Investment Trust Analysis

We can see that the Over The Counter (OTC) market is in  bullish consolidation and printing a bull pattern above support of  $75.00. We like to keep an eye on the OTC market for a general idea of  how money is flowing in all BTC markets. This is a strong sign of OTC  demand, should the price hold the $75.00 level. 

Conclusion

With the potential Winklevoss ETF approval date of October  12th, we see a great opportunity to buy and accumulate BTC should the  price drop in the $550.00-$575.00 range. This should give us a great  speculative play. The ETF is expected to double the price of Bitcoin if  it is approved by the SEC. Short term, we do see a decent short  opportunity as we are expecting the price to retrace a bit going into  October. If shorting, keep a tight risk level because we are in a long  term uptrend. 


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. 

 Data Source :  http://bravenewcoin.com/news/bitcoin-price-analysis-volume-breakout/ 

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