Bitcoin Price Report for March 20, 2017
Mar 20, 2017 --- (ARCHIVED) Free Reports
Thankfully the market took a respite from the recent volatile downward price action throughout most of the weekend following a local low of 944 $ which was put in early on Saturday morning. After that low, price proceeded to tread water for awhile before heading back above the 1000 $ level where it spent the better part of Sunday chopping around. While this brief period of relative calm in terms of the technicals was welcome, things weren't as sanguine on the fundamental front considering BU seems to be intensifying and accelerating their campaign despite the recent speedbumps (read: bugs) in the code. Exchanges have even begun to release statements of intent and procedure in case of a hard fork of the network, which tells us that we are as close as ever to a contentious split. Having said that, even at these increased odds we still put the probability of a HF in the [members-only text] area, meaning we still think it is more than twice as likely that we don't end up with two coins in the end. In light of all of the controversy, let's see what the charts are saying may be in store for this week.
Back to the 6-hour chart today as we want to provide some analytical continuity regarding the shorter term outlook heading into this new and uncertain week. Notice that price was able to take out the ETF rejection lows on Saturday, albeit not by much, although volume was slightly lower on this recent move than it was on the previous one. We can also see that support was found in the lower demand area, the upper part of the [members-only text], and around [members-only text]. Speaking of SCMR, note that we are currently trying to put in the first [members-only text] since the middle of last week following a nice looking [members-only text] coming out of the demand area, a sign that there could be some additional [members-only text] before running into more substantial resistance. This is being confirmed by the momentum indicators which all appear to have bottomed out for the time being and are starting to move out of oversold territory, however the EMA's are now bearish, the 50 SMA is rolling over to the downside, and the 200 SMA remains broken. Again, we think most of these signals are hinting at more [members-only text] over the early part of this week, perhaps all the way up to the congestion areas between [members-only text], however still bearish market structure and a mixed longer term outlook are keeping us [members-only text] for the time being.
Moving on to the daily chart, we can see that things make a bit more sense when put into this context. One of the main features to note is that support in the form of the upper demand area, [members-only text] zone, Ichimoku Cloud, and medium term trendline held on the selloff early in the weekend which tells us that bulls are still interested in buying if the price is right. This is also inline with our call for an extended consolidation, likely within the symmetrical triangle which has now been confirmed with another touchpoint, that could easily stretch out into the [members-only text] time period if the Core/BU situation remains at an impasse. The implication of this forecast is that there could indeed be more [members-only text] from current levels, although we think it ends near the [members-only text] and [members-only text] zone prior to rolling back over to the downside to [members-only text]. This hypothesis seems to be being confirmed by the momentum oscillators which are near term oversold but are not yet sending buy signals (other than PPO), and the A/D line which has taken it's first noticeable tick down since late January. Overall, we think the price action over the weekend reinforced the idea that we are now in a broad and choppy consolidation phase until more clarity is received regarding the scaling debate. Until then, it looks like "buy the dips, sell the rips" remains the name of the game for now.
We must admit that the market held up better than we expected it to going into the weekend, especially considering how uncertain things are from a fundamental perspective right now. Many leading bitcoin public figures have come out and said that they have liquidated long bitcoin positions in order to preserve capital in case of a major dump catalyzed by a hard fork. While we understand and sympathize with this sentiment, we think it is a bit premature seeing as though we are still pinning the odds of it materializing at way less than 50% which makes fully moving to fiat at this time quite the gamble in our opinion. If it begins to look like BU is losing steam, which we can now gauge partially via Bitfinex's new BCC and BCU markets and partially by nodes and hashrate, then price would likely rise substantially. Conversely, if things stay the way they are or get even more heated, then we [members-only text] until further notice.
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Posted ProTrade Ideas:
1.) **Bitcoin ProTrade - Very Short Term [UPDATED on 3/13/2017]**: We will consider a [members-only text] position in the [members-only text] area with a stop around [members-only text] and a target of [members-only text].
2b.) **Bitcoin ProTrade - Short Term [ISSUED on 3/20/2017]**: We will consider a [members-only text] position in the [members-only text] area with a stop around [members-only text] and a target of [members-only text].
3.) **Bitcoin ProTrade - Medium Term [UPDATED on 3/20/2017]**: We will consider a [members-only text] on a move to the [members-only text] area with a stop around [members-only text] and a target of [members-only text].
4.) **Bitcoin ProTrade - Long Term [ACTIVE; UPDATED on 3/17/2017]**: We will stay [members-only text] off of the [members-only text] level with a stop around [members-only text] and a target of [members-only text].