Analytics provided by BBA
Brexit, halving, auctions and exchange problems have dampened demand enthusiasm for Bitcoin over the near term.
However, a much needed pullback might be just what the bulls ordered as we approach Q3 2016.
Following what was a relatively quick sprint from $430 to $790 over the past month, the market is finally taking a much needed breather despite the Brexit drama last week. The Australian auction of over 24,000 coins, various exchange issues and outages, and halving uncertainty are all contributing to the near term weakness as well.
Having said that, “near term” are the operative words seeing as though this action is healthy for the longer term sustainability and longevity of the current bull market. Once we get yet another rangy consolidation out of the way, we can move forward with a test of $1000 (hopefully in the latter half of this year).
We will be looking at two Bitstamp charts today as we continue our journey into the technicals of the bitcoin markets.
A quick note, we prefer to use Stamp for the medium to long term analysis due to more extensive price history and additional continuity, however we will switch to Bitfinex as we narrow our timeframes going forward. Back to it, we can see on the 3-day chart below that $150 - $300 is the long term accumulation zone with OTE and trendline support sitting between $300 - $400.
This tells us that we are unlikely to see sub-$300 coins anytime in the near future, but if we do the risk/reward will heavily favor the bulls. Additionally, the 200-period SMA is accelerating to the upside while the A/D line trends higher, and the momentum oscillators continue to correct quite healthily. Despite the fact that price very well could press lower over the next few weeks to test the 450 – 500 $ breakout area, the bull market remains intact and dips likely will continue to be bought by investors and swing traders.
Now that we have a pretty good idea of what is going on longer term for bitcoin, let’s turn to a medium term chart in the form of the 12-hour one below.
No doubt that market structure has turned bearish as it has now become clear that a near term top is in above 775 $, that said price action has remained surprisingly resilient at key levels. Notice that it bounced right at the 200 SMA and middle of the OTE, and got near the SCMR dynamic support area even as the momentum oscillators still had a lot of room to run lower. Combine these indications with a volume profile setup that needs more filling in and we think that the market can remain choppy between a 550 – 700 $ range over the next few weeks. This will prep the market nicely for a post-halving continuation.
For the time being we think the smart money will stay neutral as players position for the next substantial move. Technically speaking the picture remains attractive for buyers with a lower time preference, and fundamentally speaking the nearing absence of SegWit and halving uncertainty should take the short term cap off of the market.
BullBear Analytics
BullBear Analytics is the longest standing cryptocurrency forecasters in the market. They started in 2010, doing technical reports in bitcointalk.org, and have evolved into a buzzing community of traders. Adam is BBA’s chief analyst.
Disclaimer: Please always do your own due diligence, and consult your financial advisor. Author owns and trades bitcoins and other financial markets mentioned in this communication. We never provide actual trading recommendations. Trading remains at your own risk. Never invest unless you can afford to lose your entire investment. Please read our full terms of service and disclaimer at the BullBear Analytics Disclaimers & Policies page.