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Bitcoin price analysis 30 September 2015

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This week, bitcoin’s price broke out strongly to the upside, a scenario expected in last week’s analysis. $224 was the final bottom, a firm base for a thrust up to $233 from the downtrend channel preceding this low.

Breaking out of the downtrend was ultimately to be followed by a short run up in price, seen here as another trend upwards. This uptrending channel encapsulates price action over the duration of this week. As of writing this, 1 bitcoin is trading at $ 236 on BitFinex, after a slight trend down from a 3 week peak at $ 241.

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Last week’s downtrend broke to the upside as seen here, breaking past tight converging exponential moving averages – 30 and 50 day.

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Price went on to pierce 100 EMA but was met by resistance, consolidating first, picking up momentum and bouncing off 30 and 50 day EMA support. This support was enough to thrust up to $241 where more resistance was met from 200 EMA.

Right now, price is seemingly in a consolidation, similar to mid-week. I expect a similar pattern to play out, and force a breakthrough past 200 EMA. One caveat is how low it will drop to find support to bounce off. The convergence of EMAs (100, 50 and 30 day) at $235 is a likely zone, but, when it is too obvious, the market likes to shake things up a bit and surprise traders.

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There is more to look out for, like resistance at $241 and $250, levels where price has failed to break this month.

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The highlighted zone lies between 23% and 38% fibonacci levels, based on $316 high and $196 low peak to peak. Resistance at $241 is reinforced here after a test earlier this month. Question is whether a run up similar to June/July will occur on breakout.

“I expect it to oscillate between 239 and 236 on Bitstamp, but with trend on my side, I do not think that there will be an upwards breakout yet. The bull has waned. More likely, I foresee a protracted decline over 2 days towards the key area of 234”

BITCOIN WEEKLY PRICE FORECAST

This week, I am neutral to bullish. I expect the market will break $241 level and make a dash for $250 – $260. First, it will have to find a bottom, and that means low prices up to $233 – $230 for support. Watch EMA’s which will likely provide resistance as pointed out earlier.

Overall however, any run up will be limited, as the trend is bearish. As highlighted, by 4,5,6 and 7, price action this month is a correction. 4-5 and 6-7 are both corrections, only that 6 – 7 takes a longer period to complete. Once complete, a counter trend will emerge that resumes the bear trend to retest $ 200.

BITCOIN FUNDAMENTALS

EUR denominated Bitcoin Product ETN Launch on Nasdaq

In a press release, via Coindesk XBT Provider AB, is launching a Bitcoin- based security denominated in Euro on the NASDAQ Nordic exchange in Stockholm. Bitcoin Tracker EUR is a debt security, specifically an Exchange Traded Note, similar to a USD denominated one that has been trading since March this year. Trading of the Euro based note is set to start on October 5th. According to CEO Alexander Marsh

“Bitcoin Tracker EUR’s prospectus has been approved by Sweden’s financial supervisory authority, Finansinspektionen, and will be admitted to trading on Nasdaq Nordic.”

Bitcoin Core Contributors Now Open to Increasing Block-size Limit to 2 or 4MB

Bitcoin core developers have been split into factions based on whether or not to increase the Bitcoin block size limit, and if so, by how much. Over the past weeks, several proposals were raised, culminating in a massive debate on the future of Bitcoin, notably Bitcoin XT debate.

It is now emerging that progress has been made on a compromise after the recent Scaling bitcoin Conference in Montreal, according to Bitcoin Magazine. Although not conclusive, there is general consensus on a ‘short term bump’. More discussions and proposals based on talks in Montreal will be held in Hong Kong, the venue for the next scheduled Scaling Bitcoin conference.

“For now, it seems that a simple block-size limit increase to 2MB or 4MB is an area where many notable Bitcoin Core developers and contributors have found some common ground.”

SIDENOTE

2 articles i recommend reading. The Dollar Vigilante – Jeff Berwick’s ‘If You Haven’t Gotten Into Bitcoin Yet… Now Is Your Chance’ and George Sammans ‘Currency wars – Race to the Bottom’. Both play up bitcoin as an alternative investment asset class in an increasingly debt fueled global economy. George looks at emerging markets currencies devaluing as the dollar strengthens. Jeff recommends bitcoin as a hedge against Central Banks fueled debt. The threat of financial crisis is real, and could unfold within the next 5 years according to gold bugs and bitcoin speculators.

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