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Bitcoin Bounce

September 15, 2017 Leave a comment

bitcoin-2729806_1280

With Bitcoin bouncing from a low near 3000 to above 3700, is it time to get excited about a big, fast recovery in price? Let’s examine some important levels to see where important resistance comes into play.

The biggest hurdle for the bitcoin price is dual-resistance at 3629.34 and 3907.00. Breaking 3629.34 is just the first step as this is dual-resistance. Even breaking above 3907.00 doesn’t by any means guarantee the price will continue to move higher. In fact, it isn’t uncommon for price to temporarily move above dual-resistance before a rally fails and moves down either between the dual-resistance levels or below both of them.

If we assume, for the sake of argument, that the Bitcoin price breaks and holds above dual-resistance then we should consider the following Murrey Math Price Grid:

8/8 – 5000

7/8 – 4843.75

6/8 – 4687.50

5/8 – 4531.25

4/8 – 4375

3/8 – 4218.75

2/8 – 4062.50

1/8 – 3906.25

0/8 – 3750

Should price break above dual-resistance, or 3629.34 and 3907.00, then this also bring into play the 1/8 or 3906.25 Murrey Math Level. If that level holds, then a move to 4375 becomes possible.

However, the larger Bitcoin price context should be considered:

8/8 – 10000

7/8 – 8750

6/8 – 7500

5/8 – 6250

4/8 – 5000

3/8 – 3750

2/8 – 2500

1/8 – 1250

0/8 – 0

The above price grid is discussed in the Bitcoin Price Road-Map. In that post the analysis indicated that price would rise above 5000 (it did) and then move back toward 2500 to 2700 (still in process).

The 3/8 or 3750 price level above is an important, but weak level. Breaking above 3750 and holding can be significant, but it is quite common for price to move above the 3/8 level and then fail and drop from there. This may be what we see with price action today.

Should the rally weaken today and price fail to move strongly above 3750 then we should consider the following levels to guide us:

5/5 – 3351.68

4/5 – 3155.34

3/5 – 2959.004

2/5 – 2762.66

1/5 – 2566.32

0/5 – 2369.99

Dual-support using the price grid above is 2566.32 and 2762.66. Hitting those levels would essentially represent a successful forecast of the Bitcoin price moving from near the 5000 level to the 2500 to 2700 range. Once price hits 2500 to 2700, the expectation, based on cycle analysis, is that Bitcoin will begin to make a move toward 10000. Don’t be surprised if Bitcoin overshoots 2500 to 2700 to the downside. Equally, don’t be surprised if price rallies extremely rapidly anywhere around 2500 to 2700. Dual-support, in this case 2566.32 to 2762.66, tends to be strong, so we shouldn’t necessarily expect a sustained price push below those levels.

Bottom Line: The Bitcoin Price Bounce may just be a relief rally and not sustainable. Expectation remains that price moves toward 2500 to 2700.

 

 

 

Bitcoin Price Falls: How Low Will it Go?

September 4, 2017 Leave a comment

bitcoin-2373265_1280

After pushing to near (or above depending on your source) 5000, the Bitcoin price has begun to move substantially lower – trading below 4300 as this is being written. Many people, especially those who are new to Bitcoin and other crypto currencies, are likely worried about where the price is headed. Fortunately, this was discussed in Bitcoin: Caution Ahead published on August 31, 3017.

With the crypto world buzzing about Bitcoin approaching the 5000 level, its progress has seemed unstoppable. However, there are some signs of frothiness. In my own local community the owner of a computer networking and repair business has started giving classes on investing in Bitcoin, Ethereum and Litecoin. The locals are discussing investing in crypto currencies, wondering which ones are the best to profit from.

But, more importantly than anecdotal evidence that there may be some temporary frothiness in the market are cyclical concerns. In fact, as Bitcoin nears the 5000 to 5500 level, the risk increases that the price will dip to around the 2500 to 2700 level.

Bitcoin has already broken through the initial resistance discussed in that post.

Additional resistance can be discovered by constructing a pure base 60 grid based on the current price level of Bitcoin.

5/5 – 6703.37

4/5 – 6310.69

3/5 – 5918.02

2/5 – 5525.34

1/5 – 5132.67

0/5 – 4740

The next base 60 grid is:

5/5 – 4740

4/5 – 4462.33

3/5 – 4184.67

2/5 – 3907

1/5 – 3629.34

0/5 – 3351.68

Potential dual-support is at the 3629.34 and 3907 levels.

Barring Bitcoin blasting through the 5400 – 5500 area, the expectation is that it will slide towards to 2500 – 2700. Once near that level expect Bitcoin to rebound and start working its way toward the 10000 level.

Bonus: This isn’t why the Bitcoin price dropped:

Sorry, it’s not the China

Yes, it always seems there has to be a “reason” for price movements to happen. Price movements happen based on cycles. There are many cycles ranging from climate to war, economic to fashion. Price isn’t unpredictable and it isn’t a random walk. Yes, predicting something like will the price of Bitcoin be up or down tomorrow can be tricky. Using Probable Price Ranges (PPRs) to bracket the day’s movement is simpler and, over time, can give a good idea which direction prices are moving. I wrote my post Bitcoin: Caution Ahead saying that near 5000 Bitcoin would reverse and head to around 2500 to 2700. The Chinese Government didn’t call me on the phone to let me know they would not legalize Initial Coin Offerings (ICOs). However, understanding cycles, probable ranges and Murrey Math allowed for the creation of the Bitcoin Price Road-Map on August 13th much ahead of when China supposedly “caused” the Bitcoin price to drop.

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