In our broader look at Bitcoin's prospects for the remaining 2016 and into 2017 we can conclude that from the previously 4 possible developments the bearish outcome is more likely from here (please see earlier charts linked below).
Whether we have a bullish triangle in the making or larger zigzag to the upside with new high in the area of 700 zone before completing the upside retracement in both cases it needs to hold at 280 - 300 zone. Failure here would confirm that Nov 2015 was in fact the significant high and that we are now in new bearish cycle that could last another year or more.
Here are the summary of technicals: 1. Made a spike high in Nov 2015 making it 3rd anniversary of the highs in Bitcoin starting from Nov 2013 high. 2. We remain below Opening high of Jan 2016 that could become yearly high. 3. We have failed to break above upper parallel of the bearish Schiff pitchfork and could now fall back in the range. 4. Both RSI and the MACD appear to look bearish which would be confirm upon MACD falling below the zero line on this daily chart 5. Initial targets 390, 360 and 300. 6. Nov 2013 high might actually be the 5 wave cycle completion that took over 4 year suggesting that we are in larger correction. 7. LTC/BTC correlation chart suggest bearish divergence developing. 8. BTC & SP500 Correlation suggest that they both move up and down to their own respective amplitude. With SP500 potentially having topped in Mid 2015 it could be now in early stage of bearish development and BTC could continue to decline along with it (be it at difference rates corresponding to their own rhythm).
For Items 6 - 8 please see secondary charts below (See chart below).
Action: a) Need to monitor the price at 280 -300 zone to see if it will hold and review accordingly. b) Till then unless we have breach above 450 area bearish stance is prudent.
Warning: This is my interpretation of price action using TA approach that I consider helps me the most but could be completely wrong. Therefore as always, please do your own analysis for your trade and risk management. You should follow this on Paper Trading Account till you feel confident to apply the skill to a live account.
UPDATE: Previously we have all been anticipating a congestion triangle which many consider has given way to the upside move. However, with new price data it down not seem to support triangle pattern at all.
Yet we have breached the 450 to the upside as noted above and it seems that unless we explode to the upside from here we might pull back to 450 - 440 zone before next leg higher as it could form a rising wedge (Ending Diagonal) which could complete a possible abc zigzag retracement of the Nov low with upside target in the region of 480 being a 88.6% retracement of the price drop from Nov High - Low.
If the price completes this zigzag in the manner described then it could offer excellent short opportunity upon completion. Till then the price action will remain choppy as swings get smaller and smaller to complete the wedge.
mkliethe
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Hi All-
Thought the group may want to know that there is a possibility 200,000 BTC from Mt. Gox could come onto the market in the near future.
I don't know of enough details to really place this event on the chart price. However, I would imagine that just before the MTGox came down, the price was well north of 600 and the some of those investors never managed to get anything would be absolutely thrilled to have a possibility of getting something back . So if they did get the choice of having their BTC returned to the amount they are entitled to under this distribution, they would be eager to sell and likely would feel relived.
Conversely, if the overseeing organisation decide to distribute monetary amount of equivalent value then they would have to have that amount liquidated first to have final amount available in cash before the exact amount for distribution could be calculated. In that situation they would have to sell the entire amount in acceptable time period which could indeed have pressure on price at least in the short term.
May be that is why there was a sudden drop of about $8 on the news. For now the price appears to have stablised. So if this continues we could see the upper region of the entire consolidation ($480 zone) retested as most optimistic scenario ($430 area needs to hold). Otherwise we could breakdown and have new down trend ensue.
Will keep it under observation and follow the price action with interest.
DanV
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UPDATE 4th April 2016: There has been very little change in overall price since publication of this chart. So nothing new to add really except that we are on a shelf which unless it holds bearish outcome is more likely.
DanV
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Time Symmetry
Possible Bullish Triangle (50/50)
Weekly linear chart suggesting "Bear Flag" -
If the Bear Flag has another zigzag to the upside into Nov 2016 to form completion top, otherwise could fail at 260 - 300 zone and continue straight down -
LTC/BTC Divergences
Likely prospect if we have a possible rising wedge into Nov 2013 high -
Yet we have breached the 450 to the upside as noted above and it seems that unless we explode to the upside from here we might pull back to 450 - 440 zone before next leg higher as it could form a rising wedge (Ending Diagonal) which could complete a possible abc zigzag retracement of the Nov low with upside target in the region of 480 being a 88.6% retracement of the price drop from Nov High - Low.
If the price completes this zigzag in the manner described then it could offer excellent short opportunity upon completion. Till then the price action will remain choppy as swings get smaller and smaller to complete the wedge.