Analytics provided by BBA
As the Bitcoin community celebrates the 2nd successful quadrennial block reward halving, market participants seems less enthusiastic about the event. Economics will trump speculation eventually, but directionless volatility might be here to stay for a bit.
The Bitcoin halving is a seminal and historical event that carries significant meaning for almost everyone involved. It is yet another example of Bitcoin’s monetary predictability, and perfectly juxtaposes the legacy system which has never been good at following through on promises. We now enter a new era of Bitcoin, one in which the economics will shift in dramatic ways and will usher in new dynamics in Bitcoin markets.
Despite the fact that price has not yet reflected these new realities mainly for technical reasons, they will be priced in eventually as natural market forces go to work. Until then, however, we are stuck trading the market we are given. Trends and patterns
The daily chart of Bitstamp below is the best view we have of the medium term technicals for bitcoin, and generally speaking things remain relatively bullish. We can see that the $150 – $250 range was the long term accumulation range, $350 – $450 was the initial consolidation range, and now the market is putting in a pennant (aka triangle) formation that tends to be a bullish pattern (secondary consolidation range).
Fibonacci analysis is confirming this hypothesis as support has been seen at the 50%, 61.8%, and 78.6% levels, telling us that buyers remain steadfast in the low $600’s. Also notice that $700 – $775 is a rather substantial resistance area, although volume is saying that it’s not as heavy as would be expected.
Additionally, momentum still looks rather weak with Willy and RSI slowly creeping lower and MACD staying below the centerline, while the 9/18 EMA cross turns bearish […]
