Bitcoin Price Analysis

It has been quite some time since we’ve dug into the price of Bitcoin, but that won’t stop us from getting into it now. So, let’s see what we can isolate about the price action of Bitcoin over the last few weeks.

Bitcoin Price Analysis

We’re going to start this analysis off with the weekly resolution:

As you can see from the green dotted-dash line in the picture above, the long-term support that we mapped out for Bitcoin in our former price analysis held up pretty damn well.

For the visually impaired, that support line is hovering at right around $3.2k-$3.4k on the weekly resolution.

From what we can see thus far, there has been a solid bounce from that point.

Now, let’s check this out on the daily resolution:

Let’s Examine the ‘Bounce’

At this point in time, the price has bounced pretty significantly from the ‘bottom’ that it was previously at to where it is hovering currently.

Let’s check it out:

As we can see from the chart above, the 30% gain that Bitcoin has posted since hitting its localized bottom is nothing to scoff at.

However, we must note the major overhead resistance that Bitcoin may run into in the near future.

Major Overhead Resistance

Below, we can see that this overhead resistance has served as a reliable resistance/support point in the past in 2017 (summer):

We can see how this served as an important support point (for a little while) before the price eventually declined in the recent downward movement of Bitcoin too:

The question now is whether Bitcoin will be able to break through this overhead resistance. Generally, in order to do so, we’d look at the RSI(14).

Relative Strength Index(14)

Currently the value of the RSI(14) is hovering at 54 points:

This means that the RSI(14) has just given us a buy signal.

This is on top of the fact that there was major divergence in the RSI(14) in the last 2–3 weeks.

You can see this outlined below:

Thus, the rise in Bitcoin’s price appears to be logical. However, it is moving in stark contrast to the Dow Jones and other U.S. market indices, which is interesting because there has been a major sell-off in assets as of late (but we’ll get to that later).

Also, it is worth noting that the CBOE Bitcoin futures expired on Wednesday, December 19th, 2018.

RSI(14) Signaling a Break Through $4.2k is Possible

The RSI(14) is far from overbought on the daily resolution. From what we’re seeing, this specific indicator is telling us that a break through $4.2k is definitely very possible.

Currently, there are no extreme buying conditions that are shown by the RSI(14).

Zerononcense Reversion Ribbon V2

The information contained in the chart above speaks for itself. However, one that was not expanded upon was the Histogram. While there has been a period over period increase in the Histogram in recent periods, it appears as though that trend could potentially fail soon.

That would indicate a subsequent contraction in the distance of the bands, which usually foreshadows a reversal in price action at some point.

Its worth noting that this is nowhere near close to happening at this point in time, so let’s not panic about that for the time being (if we’re going to continue being bulls).

Zerononcense Price Bands

The bands are showing that the price modestly avoiding overextension as well (nothing serious) with the candles touching the top of the ZN Price Bands:

Zerononcense Double Guppy Channel

Similarly, the ZN Double Guppy Channel reveals that the price action is showing an appropriate reaction to the current price movement:

Ichimoku Cloud

It has actually been a while since we’ve discussed the Ichimoku Cloud, but it appears to be relevant at this point since the resistance on the daily resolution for the Ichimoku is directly overhead for Bitcoin.

Let’s check out what it’s showing us below:

The convergence between the Tenkan-Sen and the Kijun-Sen on the Ichimoku typically point to impending reversal.

Obviously, this has already happened with Bitcoin’s price to a large extent. However, a definitive cross would be a major signal. So, we’ll make sure to stay vigilant for that in the near future as well.

Another thing worth noting is that the bottom of the cloud for the Ichimoku is at $4.6k, which is over top of the $4.2k resistance that Bitcoin is currently nudging against.

Zerononcense Balance of Power RSI

This is probably the only indicator that gives us a slight reason for pause:

As one can see, the indicator is currently signaling that the buy pressure for Bitcoin is at an extreme currently. Now, this is something that can sustain itself for an indefinite amount of time but extremes are always a precursor of impending reversals because nothing can remain at an extreme forever in the markets.

Conclusion

Currently, Bitcoin is not signaling danger yet. The overhead resistance is something that bulls should be concerned about but not overly so.

There does not appear to be anything in the charts that would indicate that the price of Bitcoin will suffer a dramatic and immediate reversal. There may be a slight impending consolidation in the near future (after looking at some of the smaller time frames), but anything more substantive does not appear to be the case for the time being.

Therefore, we will revisit Bitcoin shortly (within a day or two max), to see the trajectory of the price from there.