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Stock Market Trend Forecast March to September 2019

Bitcoin Price Analysis

Currencies / Bitcoin Sep 12, 2017 - 12:31 PM GMT

By: MarketsToday

Currencies

If Bitcoin breaks below most recent low a deeper correction becomes likely

Summary

Bitcoin forms potential Head and Shoulders Top at resistance of Fibonacci confluence

Breakdown likely leads to a -29% or greater correction


Bitcoin (BTC/USD) topped out at $4,979.90 last week before moving into a retracement that has so far seen a decline of as much as -19.6%, as of last week’s $4,001.93 low. That percentage decline approximately matches the previous two retracements, which were -19.6% and -18.3% respectively. This likely means that if Bitcoin falls below $4,001.93 support with conviction it is heading lower.

Prior Retracements

We can see on the enclosed chart that each of the four corrections occurring from January to mid-July were approximately -29% to -38%. Therefore, if last week’s low is exceeded to the downside a minimum decline of -29% can be anticipated and up to at least -38%. That would put the targets for Bitcoin, following a breakdown at approximately $3,535 to $3,080. The lower price target completes a 61.8% Fibonacci retracement of the uptrend begun from the July swing low.

Is there any supporting evidence to suggest that the $4,979.90 peak may stop the ascent for now? It turns out there is some evidence. Last week’s high is in a resistance zone of three Fibonacci price resistance levels. These can be seen on the weekly chart below and include a 461.8% retracement, a 141.4% projection, and a 261.8% retracement.

Head & Shoulders Top

Further compounding the short-term bearish case is the potential head and shoulders top now present on the daily chart. A breakdown trigger occurs on a move below $4,001.93 with the minimum target approximately $3,024, based on the measurement of the pattern. That target is also very close to the 61.8% retracement thereby increasing the significance of the $3,080 to $3,024 target zone.

Bruce Powers, CMT
Chief Technical Analyst
http://www.marketstoday.net/

© 2017 Copyright Bruce Powers- All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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