Bitcoin 50, 100-Day SMA, Keltner Channels Point to Lower Price

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
Bitcoin is in process of moving lower. You can see this pretty clearly and simply by looking at the 50 Day SMA , 100 Day SMA and Keltner Channels .

Essentially this is an action-reaction process. Looking at the March-April time period the Bitcoin price fell below the Keltner Channels (most or all of one candle body) for 17 days.

During May and June the Bitcoin price rose above the Keltner Channels for 20 days.

Bitcoin price now has fallen below Keltner Channels . If similar to past two instances where price rose above or fell below Keltner Channels , then Bitcoin will stay below channels for 17-20 days.

Price fell below on 7-27-14 so price could stay below Keltner Channels until 8-15-14 or so.

At this point, would not worry too much about up and down price swings. In other words, don't get sucked into buying just because of a $50-60 price swing. Wait for move lower to play out.


What are your feelings on the soft support in the $550s? And do you think that there's a chance for a movement down to the hard support in the 400's?
TerryKinder MarvinMartian
I don't think support in the $550's will hold this time. I believe the price will continue lower through about the middle of August or so (could be a few days on either side of the 15th.

We could take out $500 and $400 both and get close to $360. This is based on two things:

1) Looking at the last time Bitcoin price moved above Keltner Channels and how far the move was from where most of a candle body was above channels to the high point. If the break below the channels is similar then you're talking about moving from $570 (first candle body low price below channels) minus $200 (size of last move up) = $370.

2) On my Point and Figure chart (not shown) there is a valid downside target of $360. So, it wouldn't be surprising if $360 is hit or a number within $5 to $10 of it on either side.
+1 Reply
ChartArt TerryKinder
"I don't think support in the $550's will hold this time. " "Wait for move lower to play out."

My man :) Yes, this is going to be the sad truth soon. We have a 1-day downtrend against us. Last time that happened was around:

December 18, 2013
February 7, 2014
March 20, 2014
April 28, 2014

So I'm sure your analysis will turn out to be true in a few days.
TerryKinder ChartArt
I'm looking at this as a pattern in light of the following:

1) Action-Reaction: Price is overbought - most or all of candle body stays over Keltner Channels for multiple days. The examples pointed to on the chart are 17 and 20 days rather than 1 or some small number;

2) Current price has dipped below 50-day and 100-day EMA and appear likely to continue heading further below them;

3) Other technicals such as KDJ which are weak on a weekly basis and in the process of forming a bottom - something I referred to when posting another chart

As discrete elements none of the things means much of anything. Taken together they paint a picture of which way the price direction is headed.
+1 Reply
MarvinMartian TerryKinder
What do you think that buy spike was today? Manipulation? Mini P&D?
TerryKinder MarvinMartian
I think we are still in a tug-of-war between the bulls and the bears. I still suspect the price will end up going lower. Not planning on going long until either $680 is hit or something substantially under $550.

Was looking at a 12-hour chart of Bitcoin price on another site and the J portion of the KDJ indicator is pretty overextended. It isn't bound by 0 or 100, so it could potentially go higher. However, the last time it got this overextended was back in June when price got up to $658.88 and then turned back down.
MarvinMartian TerryKinder
Hey, a slight OT question (I guess it became, questions)... I'm transitioning from forex and their charting styles, do you find an advantage with Heiken Ashi? Have you/do you do trading in "World Fiat" Forex? If so, do you use it there too? And last but not least, have you ever done any forex programming?
TerryKinder MarvinMartian
No, I have never traded Forex. Heiken Ashi is nice as it lets you see more clearly the trend up. Have been playing with it to find swing trade opportunities.
MarvinMartian TerryKinder
15m chart shows a ton of buy vol action, now I see a strong sell vol action. P&D 2nd phase in progress =)

That's curious, Heiken Ashi changes the vol representation too? In that view + 15m I show strong sell, but on Candlestick, that same bar shows as a buy??
TerryKinder MarvinMartian
Here is a pretty good explanation of Heikin Ashi candles...


And another on Heikin Ashi versus regular Japanese candles...

I don't have an answer to the volume question.
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