Short Term Update: Now Bullish

In the previous update I mentioned as a possible resistance area the price zone from 480 to 510 dollars but the price has risen above my short term VWAP, i’ve to conclude that at least in the short term bitcoin has returned to a bullish position.
At this point I think that  XBT/USD could test the $ 540 resistance before some profit taking will take place.

The volume on all the main exchanges is high. Usually, momentum investors prefer to buy stocks that are rising with high volume, i hope they will be back to restore bitcoin price to at least 600 dollars as it was before the recent selloff.

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Short Term Update

I expected the support at $475 to hold instead the market has dropped further more to $ 440 or so, with this decrease the VWAP average adjusted itself to $ 509 from $520 and the first negative deviation line is now at 480 dollars.

I believe that XBT/USD will eventually end the rebound in this price zone, between 480 and 510 dollars; after that it will probably resume the drop within 24-48 hours. Any strength above $510 would suggest the intention of this market to reverse to the upside confirming ~$440 as a temporary bottom.

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Quick Short Term Update

The market has failed to stay above $500, at this point I think it is directed to the second deviation line of my short term VWAP at about $ 473. Once there I expect a rebound to at least $ 490-495.

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UPDATE

While i was writing the update XBT/USD touched 475$, let see if it will rebounce from here.

Short Term Update: 60 min chart

chartThe recent sell off has brought the bitcoin into some decent short term support; the top chart above shows the XBT/USD coming into support that is defined by the first deviation line of VWAP, computed using only last 7 days of data for a very short term indication.
The bottom pane of the chart shows the RSI in oversold territory but its average is higher and this let me think that there should be a retest of the $500 support level.
It would appear to me that strong support in the near term comes in around the $470-$480 price zone while resistance is at the VWAP, now at ~$530.

I don’t expect to see bullishness soon but there is the possibility that if $502 will hold then bitcoin will have enough energy to recover the $550 level before dropping again.

Short Term Update: genuine crash at bitfinex or an orchestrated manipulation?

chartThis is a 5 mins chart of Bitfinex, i suspect that the decline may have been started by few speculators who knew that due to the margin call effect would have done the rest stacking and forcing many sale orders in multiple accounts provoking a quick flash crash that pushed the market enough low to allow them to rebuy at a much lower price.

Aniway the price is recovering and moving towards the fast VWAP at $535 that will act as resistance for the next few days.

UPDATE:
An interesting article about what supposedly happened at BitFinex.

Long Term Update: At Support

chartI attached here on the left a long term chart where each bar represents one day of market activity.
XBT/USD is fully in a short term corrective phase inside a long term bull market because the price recently has been above my one year vwap, now at $530.

I think that if there will not be an increase in volatility it is unlikely that we will see a drop below the VWAP, instead if a small flash crash will develop this month the support could be at about $450 (in between the VWAP and the first negative deviation line now at ~$373)

At this point if I see in the coming days the volume turning positive (it is also a sign of a recovery),  I might decide to increase my bullish position.

(Price Data used in the chart is an average of several exchanges)

Short Term Update: Forecast for this week

XBT/USD reacted from the triple bottom at ~$555 but I think that this market is now flat with a short term bearish tendency, for now buyers showed up at the first static support level. The 1 year VWAP is now at $520 and the 2 months VWAP at $508, i consider this price zone a good buying opportunity in case of a further drop below the static support ($555).

Weekly price levels computed with my method are:

Support: $559
Resistance: $600
Volatility level: 20%

For volatility level expressed in % i mean the instantaneous volatility level compared to the highest historical value (100%), why instantaneous? because it is computed using only last 20 days.

Long Term Update

chartThe trading range has been broken to the downside, at this point it is better to check my 2 months VWAP to see where are decent supports.
We have ~$570 and the VWAP itself at $500. At the moment the price is floating around the first positive deviation line ($570) i’m not sure if it can react from here or not despite the fact that the daily RSI is very oversold, but if during August there will be a drop down to $500 i’ll probably increase my position.

With the recent level of volatility (relatively low) a drop to $500 is possible and i think that there are many investors out there ready to buy at a cheaper price, at or below five hundreds dollars.

To conclude, we are seeing a physiological drop, totally unrelated to good/bad news; it is only an issue of supply and demand trying to find a new equilibrium point; once reached a new bottom is established and this market will be ready to move up again.

Short Term Update: again congestion

XBT/USD is again in a congestion, i’ve already spoken many times about how to measure a congestion in previous udpates but remembering the Romans saying: repetita iuvant (repeating does good) i decided to repeat again the whole concept of price congestion.

Congestion occurs when four consecutive bars open or close within the range of a “measuring bar”. A “measuring bar” becomes such when its price range contains the opens or closes of at least three of four subsequent price bars. Price movement may be broken into three distinct and definable areas:

  1. Ledges – less than 10 price bars
  2. Congestions – 11-20 price bars
  3. Trading Ranges – 21 bars or more with a breakout usually occurring before the thirtieth bar

Now 20 days are gone without a breakout above or below the “measuring bar” (i consider the measuring bar the one of last 30 June) and we are in a congestion and close to become a trading range. The reported channel upper and lower price level is very similar to our measuring bar, from $595 to $640, I expect a breakout above or below these 2 levels within the next ten days because on average a congestion phase for this market never lasted more then thirty days.
I’d be very surprised to see the price still inside this trading range in August, IMO the odds are for a breakout above $640 considering the underlying trend which is pushing up.

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Short Term Update

chartXBT/USD is slowly retracing back in the lower part of the price channel. This price channel is computed using a fitting function that highly smooth the data and the deviation lines are computed using the average true range, overall it is a bit different from the other approach used by me: VWAP and its deviation lines.
The color of the midpoint channel line represents the slope, white it means the tendency is flat, red and green for a bearish or bullish tendency.

I think that this market is now flat with a short term bearish tendency that should end with a new low at or above $575, any weakness below it and especially below the recent bottom at ~$550 would be bearish IMO.