BITCOIN PRICE BREAKS $260
Bitcoin price is being bought up in rally that began as a whimper, and is now approaching a way point after covering $40 in 3 weeks of strained advance. Once correction sets in we will be able to assess if this rally has legs.
Bitcoin Price Analysis
Time of analysis: 14h56 UTC
Bitstamp 1-Day Chart
From the analysis pages of xbt.social, earlier today:
The current advance is approaching two instances of reverse divergence in the momentum indicators.
MACD (top) is about to rise above a previous price high of $295 in the Bitstamp chart, whereas price is only, in fact, near $260.
RSI has already resolved one instance of reverse divergence prior to this week’s surge higher and is now approaching its prior high made at $310 in the Bitstamp chart.
Price is only likely to continue beyond these reverse divergences once it has retraced some of the current advance. The MACD reverse divergence is likely to cause acorrection, whereas the RSI
reverse divergence to this year’s price high is likely to cause trend reversal.
The relentless advance of the current upside wave is surprising – for its bull-headed persistence and not so much for its distance, which at $40, is less than what the bitcoin chart covers in a day during a typical advance.
At the moment the bulls are grappling with $260 and 1700 CNY. Large orders are being filed below price and the abandon with which participants are buying warns of approaching reversal.
The green 20MA is about to cross over the red 200MA in the 1-day chart and this is a bullish indication, but the reverse divergence discussed, above, is likely to disrupt the MA buy signal – at least temporarily – and perhaps offer participants an opportunity to enter the trend if it is not sold off to the support floor during the correction.
Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria – John Templeton
If only Mike Hearn and Gavin Andresen had not broken the one-and-only Bitcoin consensus rule, this rally would have been believable. Buying into a fundamentally broken Bitcoin that could potentially splinter, or lose coins next February, does not seem like sound investment practice. Once February has come and gone and XT has been relegated to the dustbin of history, that will be the time to buy into an ideologically sound Bitcoin protocol.
Bitfinex orderbook depth and Buy/Sell Volume: