Given the good price reaction from the 5400$ bottom, I decided to update the price levels for this week to 6250$-7600$ with an extreme to $9000.
As I often say, the higher the bottom, the higher the chance is that the following top is very high and could be between 9000 and 10000 dollars, we have seen that the market almost never reaches the fourth VWAP deviation line so let’s say that a good top could be around 9000$.
The ALMA moving average isn’t yet bullish but it’s close to reverse its direction while the RSI failed to reach oversold territory and this means that the market remains very strong despite all the FUD of last week.
XBT/USD weekly price range 4800$-6200$ | The resistance price area run from $6200 to $7600 and is defined by the 1st and 2nd VWAP positive deviation line.
Last week I had hypothesized a correction down to the support zone between $6500 and $5400, so it was with a minimum at around $5500. I honestly expected less bearish pressure, but it is a long time that the XBTUSD cross does not return to the mean, our 2 months VWAP.
I think the correction is not over yet, most probably it’s time to test the 2 months VWAP which now is $4800. I think it is very difficult to reach the $3300 or the first negative price deviation line, this has not happened for many many months and such a drop might also help bitcoin cash to surpass bitcoin market cap, an event that could frighten the bitcoin community. Despite my personal bias about BCH I still own a part of the bitcoin cash obtained with the fork; for now I don’t sell them to help diversify my investment in cryptocurrencies during this period of high volatility and uncertainty.
The RSI oscillator would suggest a decrease but it is to be seen if it succeeds in bringing itself below 50, even here it is worth the same discourse done for the VWAP, it is a long time that the oscillator does not go into oversold territory so I would not be surprised to see it in that area during the week.
In the event of an unexpected catastrophic news, the support area on the weekly chart is updated to USD 3100-3700.
Many will think that the unexpected catastrophic event was the attack on bitcoin by some market forces, in this perspective I tend to disagree because we are very far from the support area calculated with 6-7.5 standard deviations. What we are seeing are the normal market forces at work among themselves, the strongest will win as well as in business in the end remains always and only one winner after a strong fight without mercy.
XBT/USD weekly price range is 6500$-7600$ | The resistance zone ranges from $7600 to $8700 and is defined by the two deviation lines furthest from the VWAP.
I think it’s time for a correction to the first support located at $6500, the buying area for this week is from $6500 down to $5400. I think it is very difficult to reach $5400, a minimum at $6500 is much more likely and would not compromise the possibility to see a new ATH this week.
As explained many times in the past, it is important to look at where bottoms and tops are located to understand in which direction is headed our cross XBTUSD , given the great strength of the last two weeks it would be more consistent to have a minimum at $6500 rather then $5400.
To conclude the first level to observe is $6500, the next $5400 and without unexpected negative news it’s very unlikely this week to test the VWAP at $4350.
In the event of an unexpected catastrophic news, the support area on the weekly chart is updated to 2250-2875 USD.
Since many people asked me more details about these extreme price levels, I want to spend few words on how the support area is calculated in case of a strong drop due to unexpected negative news. I use the last 52 weeks to calculate bitcoin volatility and starting from the closing price of the previous week I project two support values using 6 and 7.5 times the initial value of the calculated volatility. In the past I have explained the concept of the “six sigma”, which concerns the construction quality in industrial processes and I have applied it in this field to calculate support levels and resistance levels which are practically inviolable and which obviously only apply for the current week.
A value of six times is used, with an extra tolerance of 1.5, to arrive at a maximum deviation that uses 7.5 times the initial volatility.
XBTUSD weekly price range 5630$-6360$ | Last week I had hypothesized a limited price activity within the most likely range, so it was except for the quick bottom done on October 18 where XBTUSD quickly recovered from the daily low.
The support area is similar to that reported in the previous update, ranging from 4900$ to 5650$, the resistance zone from 6360$ to 7080$.
I don’t expect to see a drop down to the first deviation line at $4900 although the RSI oscillator and its average are both overbought.
I believe that this will also be an interim week with the price remaining between 5630 and 6360 USD; I therefore find it unlikely that a strong bearish move will push bitcoin down to the 2-month VWAP at 4175$.
To conclude the first level to observe is 5630$, the next 4900$ and without unexpected negative news I see it impossible this week to go below 4900$.
In the event of an unexpected catastrophic news, the support area on the weekly chart remains unchanged at USD 2400-3100.
XBT/USD weekly price range 5350$-6600$ | The most obvious thing for this week is that the XBTUSD cross will spend most of the time in a sideway movement between 5350$ and 6000$ considering that it comes from a rise with a strength never seen before since I follow bitcoin.
The buying area is the same reported in the previous update, ranging from 4700$ to 5350$, the resistance zone from 6000$ to 6600$.
The RSI oscillator and its average are both overbought as logical after the sharp rise seen in recent days. I believe that this will be an interim week with the price remaining between 5300 and 6000 USD, so I think a strong bearish movement is unlikely to push bitcoin down to the 2 months VWAP , now at 4100$.
In the event of an unexpected catastrophic news, the support area on the weekly chart rises to 2400-3100 USD.
Updated weekly price range is 4730$-6600$ | It is interesting to note that the cross XBTUSD after two days of hesitation exactly on the second deviation line of our 2-month VWAP average then violently broke the resistance level to reach for the first time in its history the fourth line of deviation of the VWAP , this is a phenomenal sign of market strength.
Theoretically, the point where it broke the second deviation line (4800$) should now serve as a support in case of a price retracement but it is more likely that for the next two-three days the support level will be the third line at 5350$.
For who sold before these insane price levels it might be wise to enter again between 4800$ and 5350$.
Should the price levels, mentioned in this update, changes significantly I will keep you updated with Twitter.
XBT/USD weekly price range unchanged at 4300$-4800$ | The two bearish days of the beginning of last week had let me think that we would be back towards the 2 months VWAP then from last Wednesday the market has returned to its original trend. These occasional weaknesses may indeed last a few days and then revert back to the original trend, which is currently on the rise.
The resistance levels remain unchanged for this week as well and are shown in the graph at 4800 and 5250 dollars.
The RSI together with its moving average have entered the overbought zone, before using this oscillator to open a bearish position, it must be confirmed by some pattern of reversal that at the moment I don’t see leaving therefore a margin for an eventual rise to 4800$.
Some of you often ask me about Bitcoin Cash, I had a support to about 0.080 but it was broken, the next support is at 0.058 which is a triple bottom along with the bttoms made on 6 and 16 August ’17. In general, Bitcoin Cash is clearly bearish, however in case of a strong bullish spike the first resistance is at 0.107
In the event of an unexpected catastrophic news, the support area on the weekly chart rises to 2200-2700 USD.
XBT/USD weekly price range at 4300$-4800$ | There is an unusual situation this week, the 2-month VWAP average is flat since the bottom of 15 September, therefore neutral trend for the short term. However, the market has surpassed the resistance value I mentioned last week, at $4300, this is a positive note.
To bring the short-term trend back to the upside we need to stay above $4300 at least for the whole week. The resistances shown in the graph range from 4800 to 5250 dollars.
In the previous update I had suggested to my readers a short term long operation from about 3600$, who followed this “trading idea” will surely have had a decent profit, I invite you all to keep this operation open as long as the XBTUSD cross will remain above $4300, below this level I suggest to close the position.
The RSI, as I said last week, has already given a sign of purchase that is now confirmed by its average which is on the rise, however we have not yet entered the overbought area leaving margin for a possible rise up to $4800.
In the event of an unexpected catastrophic news, the support area on the weekly chart rises to 2100-2600 USD.
XBT/USD weekly price range at 3070$-4300$ | The situation is unchanged compared to the previous week, the market is flat as well as the 2 months VWAP and basically also the ALMA average, slightly negative almost flat.
By now you all know that more or less after a week of volatility contraction bitcoin breaks up/down with a peak of volatility; I expect soon an increase in volatility that will soon resolve this neutral phase that the XBTUSD cross is going through, the hard part is that i can’t say which direction it’ll take.
Investors seem to have digested the negative news of this month, first China then the negative comments of traditional bankers, all these efforts to push the price down ended with a bottom at 3000 dollars, we can consider this price level an important level of support for the weeks to come.
RSI, as I said last week, has already given a buy signal on the daily chart, which is also confirmed by its average which is on the rise, but this is the only positive note in a still uncertain picture.
A rise to 4200 dollars is not enough to confirm a reversal of the trend, you have to see strength above 4300 dollars to be able to say that even on the weekly chart has reversed the current bearish trend, however for those who want to try to anticipate the market could try a short-term upward operation with stop loss below 3500$ and target price around 4200-4300$.
In the event of a catastrophic news, the support area on the weekly chart remains unchanged at 2000-2500 US Dollars.
XBT/USD weekly price range at 3650$-4300$ | As I wrote on twitter the market found support within the support area of my previous update that had a lower limit of $2800. I would like to point out that I will not increase my long-term position opened between 2014 and 2015, but I will tell you when there will be a buying opportunity.
Today’s reaction is positive and I believe that in 1-2 days the ALMA moving average will turn upwards together with the average of the RSI oscillator.
The RSI has already given a purchase signal, but it is better to confirm it when its average slope will also turn positive.
When these conditions are met we will have a buying opportunity.
In the event of a catastrophic news, the support area on the weekly chart remains unchanged at 2000-2500 US Dollars.
Updated weekly range is 2800$-4300$ | For the first time in many months the XBTUSD cross is testing the VWAP volume average calculated using the last two months of daily data.
This is certainly a sign of a slowdown in the current upward trend, it is important to see how long prices will remain around the VWAP average, which today stands at around $3600, a quickly reaction to the upside from here would mean that this market is still very strong and resilient to all attacks it is receiving since September.
From here to Sunday there could also be a quick visit to the first negative deviation line located at 2800$ but looking at the weekly chart there seems to be room for a minimum in October around $2500, in any case later this month I will publish a long term update to better understand where we might have the next medium term bottom using the weekly chart and not the daily chart more suitable for short-term price movements. This mid-term bottom must be ABOVE the previous one of 1800$ happened in July ’17 in order to mantain a sequence of higher highs and higher lows.
The RSI oscillator enters the oversold zone after several weeks with its average just above the oversold threshold located at 30, this may mean that a short rebound of few days is ahead, typical after abrupt downward movements.
Overall I think that the XBTUSD cross can hardly lose more than 50% of its value in a single movement, this would mean strong support at $2500.
XBT/USD weekly price range at 4000$-4950$ | The price range for this week is not very different from last week, we have seen until now a weak September with the price drop from the all time high of 5000$ and despite several negative news the XBTUSD has remained above 4000 dollars.
As you can see in the graph the support area using my KAMA indicator ranges from $3600 to $4000, the resistance zone from $4950 to $5350.
If the 4000$ support will work, then an upward cycle with a minimum target of 4950$ could start, otherwise the 2-month VWAP around 3400$ is an important support.
I think it’s unlikely to see bitcoin under the vwap at 2 months for this and also next week, otherwise it would mean that on the weekly chart a medium-long term correction has started; however it’s still early to say and let see if XBTUSD can stay above $4000 this week.
In case of a unexpected catastrophic news, the support area on the weekly chart is 2000-2500 USD