Bitcoin - The Next Move
Updated
Bitcoin has had a nice bounce from the recent lows at around $9,000 USD, which i forecast as a possibility earlier based on the weekly chart, namely the doji candle.
The question is, where to now?
As with any good forecast, there are always two scenarios that could play out, i will lay out both the bullish and bearish scenarios
Bullish Scenario:
$9,100 USD is the near-term low and Bitcoin consolidates from here and we begin the next phase up, likely making a push to $14,000 USD and potentially testing the 78.6% Fib level at around $16,000 USD. We can be more confident in this scenario if this bounce continues and pushes past the 20 daily ma, which is currently around the $11,000 USD mark, this will also need to be accompanied with strong volume.
Bearish Scenario:
As you can see from the weekly Bitcoin chart, we are currently at the 9 ema, this level has acted as major support during the 2017 bull run, however, Bitcoin has broken this level several times, eventually settling at the 20 ma, currently at around the $7,400 USD level. If we fail to rally from here and continue to show weakness, then a move down to this level is entirely on the cards, given the run we have had, this would represent a healthy pullback and would present a fantastic buying opportunity. This level would also coincide with the prior resistance levels that Bitcoin held before breaking down to the $3,000 USD mark.
I don't have particularly strong feelings towards either scenario at press time, I think a pullback would be quite healthy and is entirely possible, however i also feel that the FOMC meeting at the end of July and the accompanying rate cuts that are expected could certainly have some effect on Bitcoin's price, as it has on gold. My current position is that Bitcoin is in another accumulation phase, which does not occur all that often, i would look to take another position at or near these levels, bearing in mind that a drop lower is possible, with the view that a move to the weekly 20 ma would be a 'load up the boat' moment.
The question is, where to now?
As with any good forecast, there are always two scenarios that could play out, i will lay out both the bullish and bearish scenarios
Bullish Scenario:
$9,100 USD is the near-term low and Bitcoin consolidates from here and we begin the next phase up, likely making a push to $14,000 USD and potentially testing the 78.6% Fib level at around $16,000 USD. We can be more confident in this scenario if this bounce continues and pushes past the 20 daily ma, which is currently around the $11,000 USD mark, this will also need to be accompanied with strong volume.
Bearish Scenario:
As you can see from the weekly Bitcoin chart, we are currently at the 9 ema, this level has acted as major support during the 2017 bull run, however, Bitcoin has broken this level several times, eventually settling at the 20 ma, currently at around the $7,400 USD level. If we fail to rally from here and continue to show weakness, then a move down to this level is entirely on the cards, given the run we have had, this would represent a healthy pullback and would present a fantastic buying opportunity. This level would also coincide with the prior resistance levels that Bitcoin held before breaking down to the $3,000 USD mark.
I don't have particularly strong feelings towards either scenario at press time, I think a pullback would be quite healthy and is entirely possible, however i also feel that the FOMC meeting at the end of July and the accompanying rate cuts that are expected could certainly have some effect on Bitcoin's price, as it has on gold. My current position is that Bitcoin is in another accumulation phase, which does not occur all that often, i would look to take another position at or near these levels, bearing in mind that a drop lower is possible, with the view that a move to the weekly 20 ma would be a 'load up the boat' moment.
Note
The Bearish scenario, at press time, is more favored (only slightly mind you), we will have to see if this little sell-off has any bite to it.Note
The current sell, does not seem to have much relative volume, this is obviously subject to change, however the lack of volume is reassuring for the bulls.
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