Weekly Range Update: introducing 4th deviation line

bitstampUSD 1 Day #1 2017-05-22 09_25_59.731
Daily Chart – VWAP + dev.lines

XBT / USD weekly price range is 2040$ – 2680$. | With this update I introduce an additional deviation line from the 2-months VWAP reference average.

The 2-month VWAP may be a bit slow now that XBTUSD is experiencing quite high volatility levels, so for an appropriate price range I decided to introduce the fourth line of deviation.

When a market is very strong it is possible that it moves between the first and second line of deviation that acts as support and resistance defining a price channel. At the moment XBTUSD is moving between the second and the third line and it does not happen very often and if you look the RSI you can see that it is oscillating between the overbought threshold (70) and the maximum value of 95-100, an extreme situation if compared to other financial assets.

Fundamentally this is an expanding market that reminds me the exuberance of stock markets from 1996 to 2000, why do I think that? Well just look, for example, at the unsustainable ascension of ethereum, an altcoin that does not have the magic ingredient to solve the scalability problems that all cryptocurrencies have and yet part of the audience perceives this altcoin as different and superior to the others and does not think twice before buying it despite it doubled its value in just six days as well as 20 years ago investors bought technologically overvalued companies that within a few months increased their listing value by two, three times and even more.
Do not get me wrong, because I think the peak is still a few years away but just be careful diversifying in altcoins.

Returning to XBTUSD cross and considering the current level of volatility it is not excluded to see it above 2400$ by the end of the week, the support area I consider is around 2040$ but in case of another profit taking support is at 1720$.

In case of extreme fall the support area is 850-1200$.
Ita version here.


5 thoughts on “Weekly Range Update: introducing 4th deviation line

  1. S

    Hey Enky,

    What do you think about ETH ?
    Is it interesting to invest in it now that is “still low” ?

    1. i consider eth too centralised for my taste and i haven’t appreciated the hard fork because of the dao hack in the past. I think also that eth is very complex and more prone to fail then other crypto. It’s hard to estimate if eth actual price is low or not, personally i stay away from too much volatile assets like this.

    1. Updated chart

      actual volatility is above historical btc volatility, this is why btc topped well above the second dev.line. Doubling the volatility the resistance level is around 4000$, also above the 2900$ resistance that i computed in january, i’ve doubts if we just did a top for this year or not, i’ve to wait a bit and see.

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