Bitcoin
Bitcoin Market Technical Analysis: Buy The Dip
Bitcoin wasted no time in breaking through it prior all-time high of $7896.04 made on November 8, 2017.
In yesterday’s technical analysis report on Bitcoin we began to see signs of Bitcoin making a strong upward push to new highs.
As of November 17, 2017, Bitcoin broke through $8000, posting a new all-time high of $8006.243. The cryptocurrency media is once again having a party with Bitcoin, after painting a “doom and gloom” picture of Bitcoin just six days ago.
Chart #1: Bitcoin Daily
Chart #1 above shows Bitcoin’s brief breakthrough the downward trend line (purple line).
After a two-day foray below the trend line, Bitcoin immediately recovered back into the uptrend-zone that it’s been on since September 15, 2017 subsequent to a similar price drop.
After fully recovering, Bitcoin went even further to break new all-time highs.
The first indication that a new high was coming was the fact that the low of the recent price drop did not fall below the low of the prior downward price swing in the trend, as indicated in the Chart. When we zoom-in on the 5-minute chart below (Chart #2) we can strong indication of the upward recovery to the new highs set by Bitcoin.
Chart #2: 5-Minute Bitcoin
Over the last couple of days, November 15th through the 16th, the 5-minute chart show upward price movements with corresponding volume spikes (as high-lighted by the shaded areas) all the way to the new high.
Chart #2 is beginning to show a change in trader sentiment.
Once price reaches the high, a shift in volume takes place. The volume spikes are now corresponding with downward price movements (indicated by red arrows).
This may indicate that price my pull back a bit, which is typical after making a new all-time high.
Bitcoin will eventually make another downward price swing toward the trend line before continuing on its uptrend to even further highs. Whether or not this is the first sign of a pullback remains to be seen.
If so, this presents an opportunity to enter the market.
If price returns to the trend line on the daily chart without forcefully breaking through, and volume patterns are favorable, this will be a good time to enter the market long, or add to existing long positions.
If Bitcoin continues upward to new heights without a downward price swing, then it’s probably better for those traders not in the market to wait for the eventual pullback to take place.
We’ll be watching closely.
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