Bitcoin Price Analysis 8 Jan 2018
The holidays are over and today most of us are going back to the grindstone. There can’t be too many people excited about that. I apologize for my lack of posts over the last few days, but I’ve been away in the bush with out any real internet connection enjoying my last few days of relaxation. From today my daily posts will be starting again.
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The correction/retracement that we have been experiencing since the 22nd of December has shaken out a number of weak hands, typically those who do not have the hodling power required for crypto trading. However, the bull market is resuming. The best way to illustrate this is by analyzing the long term trend lines. In my previous article I explained how Moving Averages work, we can use these to examine what the trend is doing. Currently, the MA’s are stacked in order and moving upwards, indicating a bull trend.
Over the last 5 days BTC has surged upwards to the tune of 20%, breaking $17 000, but has subsequently given back half of those gains and is currently trading at $15 800. It has found support at the 8 day exponential moving average (EMA 8). The next level of support is to be found at the EMA 20 (+- $15 100). It is normal in any market for price action to oscillate around the moving averages; the further away from a MA price is, the more likely it is to return to that trend line. Over the last few days BTC moved rapidly upwards, above the EMA 8, it is currently returning back to EMA.
However, the recent uptrend that we have seen may simply be a dead cat bounce, but I am not currently that convinced of this. The downtrend is not strong enough. Supporting the dead cat theory, the MacD indicates that momentum is turning downwards again. I think the more likely explanation is simply profit taking after a 20% up-move.
In the altcoin market over the last 5 days there have been some interesting developments. Ripple (XRP) has dropped significantly, while Ethereum (ETH) and Ethereum Classic (ETC) have made substantial gains against Bitcoin. All three are up against BTC over the time period though.
EOS, Dash, IOTA, BCH, LTC and Qtum are all down vs BTC over the same period. That being said, over the past month, these coins are all still up vs BTC. The standouts have been XRP and Qtum, followed by ETH and EOS. The only one in this group to under-perform BTC over the last 30 days has been IOTA (but in November it was the top performer). This indicates the utility of having a well balanced portfolio.
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