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Technical Analysis: Bitcoin Price Action and Prediction

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There has been a lot of different opinions regarding the price of Bitcoin and where it may go within the next little while. I have read predictions of $3000 – $4000 and those that have stated rallies of epic proportions. Who really knows. I prefer to keep things simple and that includes my technical analysis (TA).

Don’t forget to read our Morning Coffee segment, titled “Morning Coffee: Stocks Stabilize, Oil is in Focus, Bitcoin Lost its way“.

For those of you who want a simple prediction of what may transpire in the coming days, and would rather see simple trend lines then this is for you. If you are looking for something like the figure below, then you’ve come to the wrong place. The image looks like a streak artifact of on a CT – sorry that’s just the doc in me.


On February 5th, we wrote an article titled: “If you own any Cryptocurrency you should sell now“. Then the price of Bitcoin was about $9000. For a while Bitcoin seem to have some positive momentum however it failed multiple times to break the $11000 – $12000 levels and it has been on a downtrend since.

Let us fast forward to the end of March and beginning of May. As you can see since the beginning of May, 2018, Bitcoin has been in a downtrend (Figure 1). The regression of the trend was calculated to be about 95{d745bfe1f0a8cfaf7934723e820c1a1fdf298af2e9634a8abb073c3029806a15}, which means that the trend has been pretty spot on. The interesting ting to note is that whenever we’ve had a rally on our hands, there has been some massive selling, which has led to Bitcoin’s inability to really break out of the downward spiral.

We have seen the previous support of $6300 – $6500 now become an area of resistance for bitcoin as it has been rejected by that level on multiple occasions in the past few days.

Figure 1 – Bitcoin’s downtrend, started beginning of May will most likely continue for the rest of this month.

In an event that Bitcoin is unable to break through this level, it will result in a sell off back to the next support level of about $5800 – $5600. We believe that there is really no volume of buyers available at this time, so once the selling starts, we expect Bitcoin to continue downward until it reaches the bottom of our trend channel, reaching about $5000 – $4900, before the month’s end.

Figure 2 – If Bitcoin is rejected again and fails to breakout of this downtrend, you can expect an approx. 20{d745bfe1f0a8cfaf7934723e820c1a1fdf298af2e9634a8abb073c3029806a15} drop in Bitcoin’s price.

The bearish narrative for Bitcoin still continues to be the lack of volume on the buy side. If there is no volume, you can expect this down trend to continue. One can assume that Bitcoin could in fact break this downward trend for a strong move to the upside, however, there is no volume. With the level of uncertainty and the lack of volume it is hard to imagine a trend reversal at this point. This is a concern for the Alt-Coins as their price is significantly affected by the price of Bitcoin.



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Disclaimer: The above references an opinion and is for information purposes only.  It is not intended to be investment advice.  Seek a duly licensed professional for investment advice. The Author does not hold any of the securities discussed above.
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Dr. Tiam Feridooni

Written by: Dr. Tiam Feridooni MD, PhD, BSc Dr. Feridooni, graduated from Dalhousie Medical School in May, 2018. Prior to enrolling in medical school, he completed his Bachelor of Science with Honours in 2010 in Biochemistry. He then obtained his PhD at Dalhousie University in Pharmacology in 2014, with a focus around regenerative medicine and stem cell transplantation. Dr. Feridooni has been published numerous high impact journals and has also co-authored a few books.

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