I am seeing several things happening right now that are pointing to a reversal. Skip to the bottom if you prefer brevity :)
The first thing I'd like to point out is that every price peak has been at an almost perfect Fibonacci level ever since the ATH in December... double top in Feb/March was a .382, May was a .618, and July was a .618. My previous analysis was that we were going to reverse at the .382 at $6900 and form a big H&S. This scenario obviously didn't play out, but you'll notice that the next fib level will be around $7500. .618 and .382 seem to be by far and away the most common fib retracement levels for BTC, At least in recent memory.
The next thing you'll notice is that we are overbought on RSI, MFI and Stoch RSI. Granted, the lines leading from the oversold regions aren't that straight and pretty, which I've noticed tends to weaken an overbought signal, but they are nonetheless getting pretty high.
The volume profile shows we are moving toward a high volume node in the $7350-$7550 area that correlates with several areas of previous support and resistance. This will at the very least mean some heavy resistance in this range.
Lastly, overall volume from this rally starting in early August has been unimpressive. Most days have been well below the 20 day moving average with only a few days touching or exceeding the MA, a sign of a weak rally. I can't remember where I heard this quote, but I think it's pertinent: A security needs volume to rally, but price can fall under it's own weight...
One caveat I will point out is that there was a huge jump in the number of shorts on bitfinex the other day, and I think we all know what whales like to do with those.
As for a price target, well, $6000 is the obvious answer and in line with my goal of a simple analysis, so that's what I'm going with for now.
TL/DR summary: Price is about to head into a heavy resistance area at an important fib level on relatively weak volume with overbought oscillators. Reversal around $7500, target $6000.
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Well I posted this last night and then all hell broke loose.
Price never hit the .618 retracement, but sometimes a big piece of fundamental news can overcome the best technical framework.
The giant spike in BFX shorts is now being attributed to insider trading. This explains why the spike looked to be in such an odd place.
Even though the low today was below $6300, it appears we are consolidating for a bit around the .618 retracement (~$6450) of the previous high.
Will be watching closely over night to see what happens.
Stay vigilant out there, there is a good reason that stop losses exist.
Thanks for the analysis. Do you think the shorts that jumped will be liquidated before the next dump to 6k? I will be scared to take a short position if the shorts dont fall back to the 17k support region which its been holding in the recent rallies.
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@obinex7g, It seems very consistent ever since bfx started allowing margin shorts that whenever a big spike in shorts happens, whales need to screw them over before price can drop again. That being said, this most recent spike is in kind of a weird place and doesn't follow the pattern of the last 9 months; a very sharp spike immediately after a very sharp drop. It looks like it could be manipulation of some kind, but whatever the end game is a mystery to me.