At a finish of March, a vast series of articles suggesting that Bitcoin would strech $20,000 or even a $100,000 in 2018 held my interest, heading me to write “A Technical Lesson In Bitcoin.” Since we cruise Bitcoin an unsuited investment or trade vehicle, we was endangered that a financial media’s extreme bullishness competence inspire shopping by those who did not know a risk.
My research in Mar indicated that a daily and weekly trend for a NYSE Bitcoin Index (NYXBT) was negative. In particular, we was examination a pivotal 61.8% Fibonacci support during $7326 because, if it was broken, afterwards a decrease to $5,500-$6,000 and potentially a $4,874-area was possible. NYXBT forsaken to a low of $6,589 in a initial week of April, that arguable my disastrous outlook.
Just a week ago, NYXBT strike a low of $5,883. With reduce and reduce cost levels, it is no warn that a view has seen a thespian spin in a past 3 months. The bullish hype in a financial press has all though evaporated. The usually Wall Street strategist to emanate cost targets for Bitcoin, Tom Lee from Fundstrat Global Advisors, has lowered his 2018 aim from 25,000 to 20,000. Since a low, a NYXBT has rallied behind to $6,585, though is this usually an oversold rebound or could a bottom be forming?
With no volume information accessible for NYXBT, we rest on movement indicators like a MACD-His, focus prove analysis, and Fibonacci support/resistance levels. As we forked out in Mar and also in my May update, a weekly MACD incited disastrous a week finale Feb 2, 2018 (point c) and was still clearly disastrous during a finish of May.
The stream weekly draft shows that a MACD line is good subsequent a Signal line and a MACD-His (in red) is still subsequent a 0 line, both of that prove disastrous cost momentum. The MACD-His has shaped a potentially bullish divergence, as it has shaped aloft lows (line d) while a NYXBT has shaped reduce lows.
For a series of years, we have been regulating quarterly focus (QPivot) levels for trend analysis. This is distributed by plugging in a before quarter’s high, low, and tighten into a customary focus prove regulation P = (H + L + C)/3. A focus acts as a pivotal turn of support or resistance, and a longer a time period, a some-more critical it becomes. As such, a QPivot can beget some-more arguable signals than monthly or weekly pivots.
One thing we have celebrated about QPivots is that we come adult with levels that are generally not subsequent from other technical methods. They also can give we a basement for 3 months of trading. When a marketplace starts off a entertain above a QPivot, it is positive, or if it opens a entertain subsequent it, there is a disastrous for a marketplace we are analyzing. Each Friday, we afterwards review a weekly shutting cost to a QPivot for signs that a trend has changed.
On Jan 19, 2017, (line a) NYXBT sealed during $898, that was above 2018’s initial QPivot of $842 that was distributed from a cost information from a final entertain of 2016. For a subsequent year, NYXBT never had a weekly tighten subsequent a QPivot. For a initial entertain of 2018, a QPivot stood during $12,748, and Friday Jan 19, 2018 (line b) NYXBT sealed during $9517, that was good subsequent a QPivot.
The second QPivot of 2018 was during $10,161, and a May high was $9593, with May’s convene unwell subsequent a QPivot. Now that a new entertain has started, a new third QPivot can be calculated, that is $7119. A weekly tighten above this turn would be a pointer that a convene from a new low is some-more than usually a bounce. It would be serve certified if a weekly MACD research also incited positive, that would expected take a few weeks. This would be a pointer that this is not usually an oversold rally.
Looking during a decrease from a NYXBT high during $18,723 in Dec 2017 to a new low during $5883, a 38.2% Fibonacci retracement stands during $10,787. A pierce above this turn is indispensable to vigilance a convene to a 50% insurgency during $12,303. There is now no technical support for a pierce to a $20,000 level.
If Bitcoin does form a bottom in a entrance weeks, we still would not suggest it for trade or investing. Among cryptocurrencies, Bitcoin appears to be a safest and many regulated, though a risk in even trade Bitcoin distant exceeds a intensity reward. For those of we deliberation shopping Bitcoin, my research is that it’s usually suitable for collateral that we can means to lose.