Remember that fourth dimension I said BTC-USD probable won’t come across a novel all fourth dimension high (ATH) whatever fourth dimension soon? Looks similar I was wrong. Shortly later posting my previous BTC-USD analysis, inward a affair of i hour, the toll of BTC-USD non solely broke its tape high, only it surpassed it yesteryear $200 later ultimately settling inward the $3200s. As of this morning, BTC-USD pushed to a greater extent than or less other ATH of $3440 on Bitfinex marker a $600+ inward less than a week. Let’s get got a hold off at what these moves tin peradventure hateful for BTC-USD in addition to if these moves are sustainable.
Starting inward the $160s, BTC-USD has been on a massive, multi-year bull run:
Figure 1: BTC-USD, three Day Candles, Bitfinex, Macro Bull Trend
If nosotros plot the style using $3440 every bit the top of this trend, a lot of historic back upwards in addition to resistance levels start to brand a lot to a greater extent than feel inside the context of the market. Our motility to the $1800s marked a attempt out of the 50% retracement line, our battle over the $2600s marked the diverse tests of the 23.6% retracement business in addition to at nowadays our ultimate precipitous rush to novel highs tin endure seen every bit the 100% retracement line.
Keeping the same Fibonacci Retracement Lines in addition to zooming into our daily trend, a few observations straightaway popular out:
Figure 2: BTC-USD, 1 Day Candles, Bitfinex, Macro Bull Trend, Zoomed In
-
There is an obvious toll increase on the long-term trend;
-
Our recent piece of job from $1800, however, has seen decreasing book on every leg up;
-
The multi-period MACD in addition to electrical flow MACD histogram both demonstrate Bearish Divergence; and
-
The RSI is showing Bearish Divergence.
If nosotros get got a closer hold off to the marketplace post-$1800s, nosotros come across a similar style of departure fifty-fifty on the smaller timescales:
Figure 3: BTC-USD, vi Hour Candles, Bitfinex, Current ATH
-
The uptrend inward toll is, i time again, accompanied on decreasing volume;
-
The 6HR is strongly diverging bearishly;
-
The RSI is showing potent bearish divergence; and
-
The 6HR Bollinger Bands demonstrate several candles fully formed exterior the upper band (shown inward the circle).
For those who are unfamiliar amongst Bollinger Bands: Simply put, they are a potent tool used to visualize marketplace volatility. Typically, when a marketplace is close the border of the upper band, it is considered “overbought,” in addition to when it nears the border of the lower band it is considered “oversold.” When a marketplace punctures a band it volition typically yield a pullback to a style inside the bands, in addition to when a candle is completely formed exterior the bands it is commonly a potent sell or purchase indicate — a sell indicate inward our case. You tin mean value of the Bollinger Bands similar a gear upwards of prophylactic bands: the tighter yous stretch a prophylactic band, the harder the reaction. Typically, this is the instance for markets that puncture the bands in addition to particularly for those that fully shape candles exterior the bands.
Looking at our electrical flow Bollinger Band trend, i powerfulness endure tempted to say, “BTC-USD appears to endure pulling dorsum inside the 6-Hour Bands — looks similar a good for yous motility upward is soundless inward the cards.” However, if nosotros zoom out in addition to hold off dorsum through the history of BTC-USD in addition to its interaction amongst the 1-Day Bollinger Bands, nosotros tin come across a clear marketplace trend.
Figure 4: BTC-USD, 1 Day Candles, Bitfinex, Bollinger Band Trend
Above are several historic examples of BTC-USDs reaction to a puncturing of the 1-Day Bollinger Bands. More oft than not, a puncturing of the bands — whether the lower or upper band — is greeted amongst a marketplace pullback. The stronger the interruption of the bands, the stronger the pullback. The strongest breaks of the bands get got a real potent style to supply to the middle business of the Bollinger Bands (the dashed line) earlier continuing its style upwards or down.
If at that spot is in addition to then much damning bear witness of a pullback, why does the toll maintain rising? Fear of Missing Out (FOMO) is unpredictable in addition to irrational. FOMO tin force markets good beyond what Technical Analysis tin predict in addition to oft defies marketplace indicator signals. With all the hype surrounding the recent difficult fork, in addition to the influx of money coming from people cashing out their Bitcoin Cash where does this leave of absence us? There is a mount of bear witness suggesting this marketplace grade is unhealthy in addition to highly overextended; it needs either to consolidate considerably or retrace. BTC-USD is tightly injure in addition to at that spot is real little, if any, sign of wellness inside its well-nigh recent marketplace moves.
I’m non maxim the marketplace won’t instruct out on to the catch fifty-fifty higher than it is currently — Goldman Sachs has a toll target of $3600, later all. However, amongst each hike inward the BTC-USD price, nosotros are increasing the likelihood of a potent pullback in addition to ultimately a supply to the middle of the Bollinger Bands.
Summary:
-
On all relevant timescales, BTC-USD is showing potent signs of an overextended market.
-
The Bollinger Bands get got several candles fully formed exterior the upper bands on the vi HR, 12 HR in addition to 1 Day Candles.
-
Historically, when the 1 Day Bollinger Bands are punctured, at that spot is a marketplace pullback.
Trading in addition to investing inward digital assets similar bitcoin, bitcoin cash in addition to ether is highly speculative in addition to comes amongst many risks. This analysis is for informational purposes in addition to should non endure considered investment advice. Statements in addition to fiscal data on Bitcoin Magazine in addition to BTC Media related sites produce non necessarily reverberate the sentiment of BTC Media in addition to should non endure construed every bit an endorsement or recommendation to buy, sell or hold. Past functioning is non necessarily indicative of futurity results.
Read Article Full Bitcoin Price Analysis: Post-Fork Exuberance Shows No Signs of Pulling Back (Yet) : http://ift.tt/2vxZBww
