Bitcoin Analysis: Price Shows Similarities with 2017. What Are Bullish and Bearish Scenarios in the Short Term?
March 5, 2019, by Marko Vidrih on ALTCOIN MAGAZINE
In October and September of 2017, the price of Bitcoin was comparable to now. Even then buyers and sellers fought for a month to break out of the zone between $3,400 and $4000. The buyers then won and the bull run continued steadily to $20,000.
We are not that far yet, but it is interesting to keep an eye on the long term. In this technical analysis, we describe good (bullish) and bad (bearish) scenarios in the short term. But it is also nice to put the current course in historical perspective. That is why we are now looking at the long-term and the moving average.
What are the possibilities in the short term?
We discuss the possibilities on the basis of a Pennant. That is a difficult word for the orange triangle in the graph below. The pennant forms since December and continues until the third week of March. Meanwhile, the course has already broken out here.
The green arrow represents an optimistic scenario. If the course follows this line, the course will bounce upwards on the orange line. For now, the course seems to be testing support level. If the course breaks support level then it is quite possible that the value of Bitcoin will go to 3,700 euros ($4180) within a few weeks.
In the negative scenario, the red arrow is leading. This means that the price does not pass the resistance and that the price is within the lines of the pen. It is then quite possible that the price goes to 3.050 euros ($3450).
The Bitcoin price is shown below in euros. We look at the exchange rate of Bitstamp. Each candle represents four hours.
The bigger picture, similarities with 2017
We compare the current price with the last time the price was in this zone. And that was in the middle of the bull run in which everyone was completely FOMO.
Supposedly: that we compare the periods does not mean that we predict in the short term that price will go up very quickly.
But there are similarities to discover. For example, the price is borne by the green zone, which is around 2,900 euros ($3280). In 2017, the price had to break through a strong resistance to be able to rise. That was then, and now again, at 3,750 euros ($4240).
It is therefore interesting to keep an eye on these two zones.
The medium-term and the Moving Average
We use the Moving Average (MA) indicator to look at what the price will do in the medium term.
Each candle represents one day in the graph below. The blue line is the 100 MA. That means that at every point the average of the past hundred days is looked at.
For months course moved below that average. Not crazy, the price was only decreasing. Now finally seems to be a turnaround. Since mid-February, the price has moved above this average. And it looks like Bitcoin is testing the MA a lot.
If the course remains above the MA, then this means that the price is recovering and in any case, it is doing better than the average of the past hundred days. But if we see the course diving under the blue line again then the opposite is going to happen.
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Author: Marko Vidrih
Charts via Bitstamp