Like all commodity markets the bitcoin price is a mystery to punters. According to polls conducted by the Bitcoin eXTended cargo-cult leadership, the "economic majority" of Bitcoin stakeholders support a fork to larger blocks. To what end? More adoption, they say. What would be the benefit of that? A price and value increase, of course!
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Bitcoin Price Analysis
Time of analysis: 04h14 UTC
Bitfinex 4-Hour Chart
From the analysis pages of xbt.social, earlier today:
Our short position remains open as price slowly declines toward the consensus target at $252 (Bitstamp/Bitfinex).
The longer-term 4-hour candle chart shows price declining in a descending channel with the last wave 5 not having reached the lower channel trendline.
Bitcoin price sometimes completes the final (5th) wave short of target - often with a double bottom. The same may occur here, as most exchange charts now show a deceleration of downside progress.
The major support levels near $252 and 1550 CNY include the 100-period moving average as well as the 200-period moving average at the daily candle timeframe. If price does make the distance all the way to target, members are advised to take profit, since progress below target is highly unlikely without first correcting to the upside.
We remain observant like trading legend Jesse Livermore and watch for signs of reversal.
Analysis Update
Time of analysis: 15h00 UTC
Bitstamp 1-Day Chart
Since June last year, the bitcoin price chart has covered some large distances of decline, and this year's price action, to date, seems limp by comparison.
The structure since January 2015 may give the impression that bitcoin has run out of gas and will just coast to an eventual halt down here in the valley. But don't let appearances fool you, the entire wave structure of 2015 has been a process of both unwinding the decline and building a base for an advance to come.
The base pattern has a low amplitude but the encouraging aspect about it is the long duration over which it developed. This is a solid structure and comparable to the 2012 base - yet it has the potential to see some strong rallies develop. We're not yet entertaining $900 or $1000 - some longer term moving averages mis-alignments mean that there will be some large intermediate corrections during the coming year - however, $500 and $680 are achievable from this base. Once it has completed the current pullback, that is.
The daily chart above shows that price has found its 200-day moving average. Price action may oscillate around this moving average for a while yet, so don't be in a hurry to go long. We'll identify the confirmations of reversal as and when they become visible in the smaller timeframe charts.
It was never my thinking that made the big money for me, it always was sitting. - Jesse Livermore
Summary
The "economic majority", as XT Hearn calls them, believes that larger blocks will lead to bitcoin price increases. In other words, whichever way you cut it, the economic majority want to see a higher price in the chart. With them being an economic majority, it begs the question: "Who then, is the economic minority that keeps selling this chart down?" And how does an economic minority of bears possibly out-sell a majority of bulls? By pretzel logic, perhaps?
Bitfinex orderbook depth and Buy/Sell Volume:
Click here for the CCN.LA interactive bitcoin price chart.
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Disclaimer
The writer trades Bitcoin. Trade and Investment is risky. CCN.LA accepts no liability for losses incurred as a result of anything written in this Bitcoin price analysis report.
Bitcoin price charts from TradingView.
Image from Shutterstock.