Yesterday’s resistance broken
Bitcoin has succeeded in breaking through a pretty solid resistance level of 234.394 setting our next target as high as 237.320 USD per Bitcoin.
New York Stock Exchange Influence
The news from a few days ago where the NYSE announced that they will begin monitoring the price of Bitcoin, has greatly influenced the current price increase. The reason is simple enough: traders believe that if NYSE is monitoring the price of Bitcoin, it has to be worth investing in. This has already resulted in the overall increase of buyers versus sellers because new investors, who have previously stayed away from Bitcoin, are now jumping in just to get a piece of the pie.
We can’t be sure how exactly all this plays out, however, for the time being it’s very likely that we are going to see some serious bullish movement for BTC/USD. Just imagine all of the “old school” traders who used to stay away from Bitcoin now beginning to question their beliefs. It’s definitely going to be one hell of a ride we have ahead of us in this summer ;)
Our patience has paid off
It’s the middle part of March 2015 right now, the sun is shining and signs of a long winter are slowly fading away. The beginning of spring seems to have helped Bitcoin reach equilibrium against the US dollar. We have closed quite a few long positions since our last Bitcoin related article and now it’s time to sit back and observe the market a little closer because we are bound to have some drawback right about now.
Bitcoin price in March 2015
We are reaching closer and closer to the overbought market condition which most likely means that the price is bound to correct itself pretty soon. There are good solid support levels around 286.675 and 283.701 and it’s likely that the price is going to try those levels throughout the other half of March, 2015.
Unless something extraordinary happens in the crypto currency world I estimate another bullish run not before April. So bulls, I’m afraid you’re going to have to hold back for a while, but know this: your time will always come!
Wait for it…
In my previous post I advised traders to sell their coins if they had any and wait at least a week, maybe even two, into the new year to see how the market adjusts itself.
After more than a week of minimal price decline the breakout finally happened and as you would expect, it was a selling marathon. Why? Because in December 2014 the BTC/USD broke through a pretty solid support level– only magic can save us now.
When will it go back up?
Well, the market is already oversold and keep in mind that a support level, if broken, will become the new resistance almost every time. So we should definitely see Bitcoin gradually climb back all the way to at least $320, but that should be all it can do in the short term. In my last post about BTC I also mentioned that we could see the price as high as $700 this year, but we need at least 3-6 months to get there.
No Elliott in sight
In my last post about Bitcoin I was fairly convinced that we have entered the final stages of the Elliott wave theory, but looking at the charts today it’s clear that it wasn’t exactly true. The market started going sideways in the last few days of November and continued to do so for an entire week of December until on the 8th of December the bears finally gave up and bit the bulls in the ass hard. As I saw it unravel I tried to get rid of the coins I was holding, but I wasn’t fast enough and my exchanger was no idiot either… So I’m still holding them for now.
Third time’s the charm
I don’t want to sound overly pessimistic here, but there’s clearly a pattern to this. Because of the latest breakout we could very well be seeing Bitcoin test our support level around $320 for the third time. The gap between the last two would mean it’s about to happen…
The candle that closed on the 21st of November is above the one that closed on the 10th of December indicating that we’re moving further down the chart. The green bull you’re seeing at the end isn’t anything significant, it’s just showing us that the bulls are here and aware of what’s happening. Not sure if they can do anything about it at this point.
Elliott hasn’t gone anywhere… yet
Right now the 5th wave of Elliott can still be seen and I believe we will see it down the road. The question is when? The bearish candle that closed on the 10th makes a pretty good starting point, don’t you think?
I underestimated the market
Guess I have underestimated the buyers potential and also the significance of the recent hidden service raid that FBI conducted earlier this week. Just look at that wonderful green bullish candle :) There’s clearly a connection between the raid and the price movement here because last time FBI closed one of the biggest darknet marketplaces and confiscated millions of dollars in Bitcoins the price skyrocketed exactly the same way just a few days later. After they put those coins out for auction the price obviously fell and now we can see the same thing happening all over again. Will they auction these coins as well? Time will tell.
The RSI indicator is showing that the price has moved over the overbought line. This along with the fact that we’ve had a crazy rally means that a price correction is imminent. How far will it fall? There is a very strong support level around the $380 mark, but I highly doubt it’s going to fall that low. A more reasonable target would be the $410-$420 area, where the price may linger for a few days before we have a better chance at entering a long position again. That being said, there’s no reason why you should close your position right now if you’re aiming for something bigger!
Riding the bulls
The last few days have simply been amazing. On the 9th of November I published a short article about the bullish movement of Bitcoin and just three days later the price has reached $400 USD.
So what now? If you look at what happened on the 11th and 10th of November then you can see a great struggle between the bulls and the bears. The market was unsure how to react, but it is clear to everyone now that bulls have won this battle. At least for the moment.
Depending on how today’s candle will close we might see another one, perhaps a bit smaller to form tomorrow.
The only thing that bothers me is the RSI which shows that we are reaching the overbought market condition very soon. When this happens you can expect a short price decline all the way down to $360 area, but it’s unlikely to hit that low.
Why? Because not only did the Thailand mining rig burn down, the FBI closed a ton of hidden services recently which means that a great portion of Bitcoin users just lost their Bitcoins. This should in theory make the crypto currency even more expensive so the bullish momentum might just be gaining its strength to a much higher level that what we’ve seen this far in which case our next stop will be around $440-$450 and upwards!
Bitcoin price in the year 2014
Bitcoin is the most popular cryptocurrency right now and it will remain the most popular and most traded cryptocurrency for at least a few more years or until someone comes up with a better alternative.
The price of Bitcoin has been quite volatile throughout the year 2014. It has touched the $1000 mark and dropped back to $300. In December 2013 we witnessed Bitcoin find resistance in the $1200 USD mark – the highest price for Bitcoin yet. This was mainly due to extreme media coverage that Bitcoin received in the second half of 2013. Literally every news agency in the world published controversial articles about Bitcoin back then and investors went crazy about it. I can’t be a hundred percent sure, but I believe that this was done intentionally to manipulate the price. In theory it shouldn’t be that difficult in the Internet era.
When I look at the Bitcoin price I always consider the possibility that there are still price manipulators out there who control the market thus making it incredibly risky to invest in Bitcoin long term. Basically any one person or organization that holds more than half of the Bitcoins at any given time can easily manipulate the price by for example dumping most of their coins all over the market in a short period of time. Who owns the biggest Bitcoin wallet you may ask? The FBI does ;)
When you look at the charts you’ll notice that since June 2014 there has been massive selling of Bitcoin about twice a month resulting in an overall price drop, followed by a weak bullish run and an even greater selling frenzy shortly after that. This has been going on for the last couple of months now and has brought the price down to just $300 USD per coin. For now we have found support around this area, but how long will it hold? 300 is a nice round number and a great psychological support level, but we have already tested $280 once!
I predict that a small bullish run to $400, maybe $450 is likely to happen in the coming weeks followed by another drop to $300. Looking at the overall trend it’s obvious the price should penetrate this support level, but I wouldn’t be surprised when in about a month Bitcoin will receive more media coverage and everyone would be saying that it’s the perfect time to buy more coins due to the relatively cheap price compared to what it was 6 months ago. This of course could skyrocket the price back to at least $600 area where it was in the beginning of summer 2014. That being said, my current setup is literally screaming BUY now.
I’ve always known media was a powerful weapon, but I never realized how powerful it really was. To prove my theory of how media influences people to buy or sell their coins I decided to check my local news portal for clues. First I looked at the 6 month price graph for Bitcoin and then I searched for news articles about Bitcoin that were published in the past 6 months. And guess what? I found that every time media says something big about Bitcoin the prices will fluctuate a lot! Whenever there’s news that some big corporation started accepting Bitcoin you should be prepared for a rally. Remember when FBI put a lot of coins on auction? The prices came down like autumn rain. Of course this was expected because there were actual coins being dumped on the market, but when a corporation like Dell starts accepting Bitcoin out of the blue the price rally can only be temporary because there are no actual coins involved.
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