Bitcoin Price Analysis 11 October 2018

11 October 2018 | Ricki Allardice
 


Interpretation of charts: The charts below are detailed with monthly and weekly structural levels. These levels are the closing prices of either the monthly (blue line) or weekly (green line) candles. Furthermore, levels which are not areas where price action has formed a reversal are excluded. Thus, the structural levels defined on the chart are potential areas of both support and resistance. Monthly structure carries more weight than weekly. The weekly chart is characterised by broad areas of support (green) and resistance (red) which are defined as potential reversal zones.

Daily chart

This wasn’t a great chart to wake up too... Bitcoin price followed on from the losses of yesterday and made a 5% + price dump in the late hours of last night. Price is currently trading around $6200. This brings the series of higher lows, that have been forming over the past month, to an end. However, should we see current price levels hold, then the long-term trend of higher lows may still be maintained.

As mentioned yesterday, I was expecting some volatility soon, as price action was approaching the descending trendline.

Furthermore, this rapid decline coincides with a large sell-off in the American stock market yesterday. It could be that some traders are selling their Bitcoin to cover their liquidated positions in the stock market.

(Click image to enlarge)image1

4-hour chart

On the short-term chart, we can see the massive red candle that formed late last night. This has broken through several levels of support and would hopefully have triggered your stop losses. The key level to watch today is $6150. If price action manages to close above this level, then the bulls have managed to keep the bears in check. If the stock market rout continues it will be interesting to see what happens in the cryptocurrency markets.

(Click image to enlarge)image2

Long-term concerns:

The concerns that I have had for the past few months have now been met, should we not see a reversal occur at or above $6550, then we could be in for a deep bear market, possibly testing the $4900 level. As it stands currently, price is trading below the 50-week moving average. The next major bearish milestone would be the crossover of the EMA8 and EMA20 with the MA50 on the weekly chart. This has occurred at the end of June. Should the reversal that we are currently seeing on the 4 hour and daily charts not form new highs, then the bears may drive price to $4900.

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Ricki

Ricki Allardice

Ricki specializes in the field of wealth management with a focus on holistic financial planning. He has a keen interest in the investment fields of property, technology, precious metals and cryptocurrencies. Ricki also holds a Masters degree in Science from the University of Stellenbosch.


Important Risk Notice:

Crypto Currencies are not defined as securities in terms of the Financial Markets Act, 2012 (Act No. 19 of 2012). The regulatory standards that apply to the trading of securities, therefore, do not apply to virtual currencies. Because virtual currencies are not regulated, users are not protected and are at the risk of losing money. Transactions are also irreversible. The price of virtual currencies is based on investor sentiment and can rise rapidly, thus attracting investors looking for very high returns from investments. However, the prices of virtual currencies tend to be very volatile and can drop as quickly as they rise. This may encourage speculative behaviour, which in turn spurs more volatility. Financial risks are, therefore, limitless and claims cannot be made for such losses.

Disclaimer:
The information contained in this article is for informational purposes only and must not be regarded as a prospectus for any security, financial product or transaction. It is neither to be construed as financial advice nor to be regarded as a definitive analysis of any financial issue. Investors should consider this research/article as only a single factor in making their investment decision. We recommend you consult a financial planner/advisor to take into account your particular investment objectives, financial situation and individual needs. The views and opinions (where expressed) in this article are those of the author and do not necessarily reflect the official policy or position of Sharenet.