Short Term Update: 4H chart @bitstamp

chartAfter the initial flash crash down to $542 sellers failed to take control of this market that is currently holding just below VWAP computed using last 15 days of data; the bitcoin price reaction from the bottom has been slightly bullish (price is holding above midpoint level of $766 of the range $542-$990 that represent the first upswing from the $542 bottom) and i believe that we can consider the recent bottom an important one, at least in the short term although i’m not sure if there is enough fuel to move above VWAP at $885 and enter bullish territory.

All these considerations are for the immediate short term, for the long term i’m not completely sure about the direction of the next bitcoin move.

Possible weekly range for Bitstamp is $720-$970 and for BTCchina 4400-5900 CNY.

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11 thoughts on “Short Term Update: 4H chart @bitstamp

  1. Jukka Santala

    China is in freefall again, MtGox trade engine lag at 10 mins looking like it’s effectively down.

    1. Jukka Santala

      Which raises the question why, the Norway news? But that was 12 hours ago, everything else seems positive. Looked like it was time for next upswing, then MtGox made a lower low, BTC China turned downward, at from 4500 into freefall with one valiant attempt to recover. So was it just MtGox failing it’s upswing, or something else going on? OH well, guess we’ll find out eventually.

      1. 3nrg

        I wouldn’t overthink it. Under 800 people own 50% of all bitcoins. The price is controlled by a select few mysterious market makers. Hacking groups and online drug cartels come to mind. Before getting too wrapped up in rsi/vwap etc. one has to look at the forest not the trees.

    2. Jukka Santala

      China turned up from 4000, for now (and will oscillate as I write this…), as I’m sure anyobdy who cares can see themselves 🙂 Kinda wish MtGox wasn’t so lagged, with 760 dollar sales and 830 dollar buys flying back and forth one could make a dirty profit, but then the lag itself is the reason for that. So will just have to wait for things to settle down. With MtGox/Bitstamp price difference stretched to 80 dollars, it seems to still have ways to go before stabilizing, even if there was no real reason for the panic.
      720$/4400CNY didn’t hold long ^^

  2. Jukka Santala

    Probably found it, unfortunately the page won’t load on my computer for some reason (server overload?):
    http://www.coindesk.com/china-bans-payment-companies-working-bitcoin-exchanges-sources-claim/

    UK’s Telegraph off-handedly claims that China has banned Bitcoin transactions altogether, which is most certainly bogus:
    http://www.telegraph.co.uk/finance/currency/10521471/Bitcoin-governments-should-tame-it-not-ban-it.html

    JPMorgan re-news patent on centralized virtual currency, tabloid-press dramatizes:
    http://www.dailyfinance.com/2013/12/16/did-jpmorgan-just-kill-bitcoin/

    Norway, richest country in Scandinavia, rules Bitcoins aren’t coins but taxable and regulated investment:
    http://www.theverge.com/2013/12/15/5214772/bitcoin-not-real-money-says-norway-government

    1. Jukka Santala

      Now that I got home to read the Coindesk article, it reads like a lot of creative writing, complete with ‘The writing’s on the wall,” said our source, adding: (emphasis box) “Going forward, from this day, third-party payment companies will most likely sever their ties with bitcoin exchanges.”’ It goes on to note there’s no need to panic because you can still cash your BTC out (at whatever the current going rate…) but won’t be able to invest more, a surefire way to make people panic and cash out.

      Whatever the truth of the matter, the price action is very real. It seems to have originated from BTC China though, so it’s possible the Chinese heard something. I could fall into BTC-e trollbox mode and observe some Chinese official must’ve felt left out of the BTC rise and wanted to grab some cheap BTC. On the other hand this further erodes BTC’s credibility as medium of money exchange, but I’m getting the impression few people even care about that anymore. All it is is another financial instrument inside a few exchanges – would it even matter if the whole Bitcoin network fell away? The exchange price differences already behave as if it had for most part.

      And yeah, I’ll stop spamming comments 🙂

      1. Jukka Santala

        http://forexmagnates.com/china-bans-payment-firms-from-working-with-bitcoin-exchanges/ reports Chinese “National Business Daily” confirms payment firms confirm ban. Still third-hand information, but at least now it sounds credible. This would supposedly mean no new investment money into Bitcoins from China (well, through Chinese payment companies at least; it’s slightly unclear to me if the exchanges themselves can’t handle payments, and certainly nobody can practically stop Chinese from obtaining and transfering Bitcoins from foreign countries).

  3. ninjabenja

    I’m not sure why everyone is surprised by the down turn. “…i should conclude that from now on it has to fall more and establish a new lower low under $542, logic conclusion”… Granted we didn’t hit that particular mark, but that was Enky word for word only 2 days ago. Was no one else ready? P.S. Enky: I’ll be sending you some well earned BTC shortly 🙂 You’re giving me a great education

    1. Jukka Santala

      While I do appreciate the service Enkil offers and agree he has an uncanny way of calling the exchange rate movements most of the time, it should be noted that “The price will fall before it rises” is probably the easiest prediction to fullfill 🙂
      You did however leave out his continuation which was “i think that it’ll stay above my important level of $650.” Since the price hit 651.34 dollars on Bitstamp, that prediction was actually spot on, so far.
      Though with such exact predictions, considering the latest low came just hours after he posted “Possible weekly range for Bitstamp is $720-$970 and for BTCchina 4400-5900 CNY.” I think everybody ought to be surprised. To be fair I don’t consider “weekly range” to contain momentary spikes and it was given only as possible range, but I doubt anybody save possibly the people who penned todays salvo of Bitcoin news actually predicted that exact price movement. There’s always action from outside the exchanges, and the charts have limited prediction power even just for movements originating from other exchanges.

    2. Jukka Santala

      Also, speaking of predictions, and allowing me to don my tinfoil hat, this suggests the pattern of large market-price sells & minimum price trades I observed on MtGox and BTC China over the weekend were market manipulation as I commented, intended to let those in the know cash out before the crash.
      This is not to say those market trends weren’t there already, just possibly contributed to and amplified by the “market guidance”. So far, however, the drop has been surprisingly little considering what has been all but confirmed; though I suppose the original drop & slow movement from the first China decision to some degree anticipated and made allowance for further government hostility. I won’t be surprised if it still drops a good bit as situation gets clearer.
      If this status quo stays, it will be interesting to see what sort of dynamic will form. Will MtGox become the deposit-only exchange and BTC China the withdraw-only exchange? How would that even work in practice? It’s been said that the reason for BTC popularity in China is that ordinary people have been able to invest in it unlike presumably dollars etc. so does this mean investing through MtGox isn’t an option to them?

      Also China back to vertical, Bitstamp support at 650 and MtGox 700 holding for a moment.

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