Bitcoin Price Analysis 6–10–2018

Photo Credit: NewsBTC

It’s been a little while since I’ve done a Bitcoin price analysis, so I want to dig into this one in a hearty manner and really see what’s going on with the price action here.

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Introduction

Last time I checked, there was a pretty substantial depreciation in the price of Bitcoin, so the purpose of this review will be to check what’s going on and see what, if anything, can be discerned through examining Bitcoin’s price.

So, from first glance — it appears as though the price started dumping heavily out of nowhere around 6–8 p.m. EST on June 9th.

I’m not sure what news came out in the market that led to this downturn, or if this is purely a market move — but it’s definitely something that’s worth taking a closer look at.

$7.5k was the support/resistance point that Bitcoin had been testing for a little while.

However, it appears as though the price is going to continue it descent.

The next immediate support for the price to rest upon is that lower line that you see drawn in my chart above.

That line is sitting between $7–7.1k.

This downturn in the price looks like a bad thing, but honestly, I would wait to see if there’s a potential bounce back factor here back up toward the $7.5k overhead resistance.

It’s worth noting that there was another support at $7.3k that Bitcoin’s price zoomed below as well.

So, the fact that there are two support points that the price broke south of with relative ease shows a pretty phenomenal amount of selling power in the market in recent periods. It seems as though it came out of nowhere and the price of Bitcoin wasn’t necessarily rubbing against a resistance.

However, it had failed to break $7.7k several times and something had to give — and it just happened to give southward this time.

It’s worth noting that there was another support at $7.3k that Bitcoin’s price zoomed below as well.

So, the fact that there are two support points that the price broke south of with relative ease shows a pretty phenomenal amount of selling power in the market in recent periods. It seems as though it came out of nowhere and the price of Bitcoin wasn’t necessarily rubbing against a resistance.

However, it had failed to break $7.7k several times and something had to give — and it just happened to give southward this time.

This is Even for the Case for the 8H Chart as Well:

I let the price ride for about 20–30 minutes before continuing the analysis to see if there would be any additional remarkable moves that would be worth catching.
RSI dropped over 38 points in just the space of one day on the 4H TF, which is pretty substantial to say the least.

A little sloppy — but outlines what we need to be outlined here.

The other momentum indicators have pretty much all indicated the same thing.

I won’t beat a dead horse in the ground by continuously iterating that the price movement was very sharp, to say the least.

Check This Out:

Also, on the 2-Day chart, the candle that is currently forming appears to be a break in a bear flag that emerged before.

Here’s a Photo of What This Looks Like for All Those That are Curious:

Now, check out where I’m seeing this bear flag there:

As noted in the picture above, the pattern pretty much fits your classical bear flag on the 2D.

However, there’s always a chance that the pattern does not complete itself.

As Thomas Bulkowski noted in his famous research of chart patterns in his book ‘Encyclopedia of Chart Patterns’, there are success/failure rates with every chart pattern.

Success = pattern finishing itself according to text book.

Failure = Any alternative outcome that does not at least involve the scenario described in the ‘success’.

Check out this link here for more information on it: http://thepatternsite.com/flags.html
This is the volume on the 2D chart. I’m sure that the volume on the 1D + 1Week chart would reflect the same if the same period were evaluated.

Overall, the volume, in general, has been way down for the crypto market (but we’ll get to that in a subsequent analysis).

Volatility

I’ve mentioned this before, and I’ll say it again — the volatility on Bitcoin has gone down to a virtual minimum over the last few months (since ATH in December, notably).

Last time I checked, it was hovering around $400 USD on the daily chart. This is something that can be checked by referring to the Average True Range (ATR).

According to the chart that I just posted — the ATR on the daily = $364.15, which means that the expected fluctuation per day (on average) is about $364.15.

There’s probably a more efficient calculation of this outside of the ATR (haven’t looked at its formula). But, I’ll get into that sometime later in life when I have the time.

For now, remember that # — $364.

As you can see here on the 1D chart, the total change in the price was approximately $423. This is almost a 16–17%+ increase over the ATR’s current value.

Now, the price has consolidated slightly up to $7.2k+ (ignore the adjusted value on the daily because that’s based on tracked movement for the daily in TradingView, which doesn’t account for micromovements in the chart that would be tracked on the substantially smaller timeframes (TF).

Personally, I don’t expect that there will be significant/substantial price action from this point on Bitcoin — just because of the lower volatility that it has been experiencing.

It’s worth noting what the entire market is doing. It was looking like Bitcoin was on its way down every so slightly even before the advent of this random spike in sell volume.

Final Remarks

It’s worth noting that even with the massive increase in sell volume, the overall volume (when you look at it in the context of the last couple of months) is still way down.

This is matching the theme & narrative that the price has to come to a head and the APEX of the triangle that’s being formed (whether you think it’s in symmetrical or descending triangle).

Like I said, $7k may be the next potential bounce point.

This will definitely drop the RSI down on all charts. We know at the very least that all TF 8H and below will more than likely be oversold for the foreseeable future, so it’s a waiting game.

In reality, the price movement appeared to be a lot bigger than it is. It was a $400–500 drop, which constitutes a loss of approximately 8% from where the daily high was for Bitcoin high.

So, there’s no reason to panic imo. This is a situation where I’d watch the indicators — perhaps wait a second and see how things develop and what information comes out over the next few hours and then make moves from that point.

Disclaimers

  1. None of this is financial advice. Just outlining my personal thoughts & my personal strategy for selection. I’m not saying you should go long/short/divest of anything. Everything is your choice. I’m posting this under the assumption that you consider this to be a platform for sharing ideas rather than advice on what course of action you should take.
  2. I do not own $BTC. No one/entity/company/corporation paid me crypto/dollars/assets/favors or any other liquifiable asset/currency to write this article and I am neither profiting directly or indirectly from its curation. This article was not written under duress/pressure/threat/extortion or any other unfavorable condition either. I am invested in a direct competitor at the moment, however, which is Bitcoin Cash.

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