{"id":23461,"date":"2017-07-21T19:09:56","date_gmt":"2017-07-21T19:09:56","guid":{"rendered":"http:\/\/ci027cfe70700d2697"},"modified":"2025-01-28T18:40:41","modified_gmt":"2025-01-28T18:40:41","slug":"bitcoin-price-analysis-recent-bull-run-calls-level-head","status":"publish","type":"post","link":"https:\/\/bitcoinmagazine.com\/markets\/bitcoin-price-analysis-recent-bull-run-calls-level-head","title":{"rendered":"Bitcoin Price Analysis: Recent Bull Run Calls for a Level Head"},"content":{"rendered":"
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Over the course of three days, BTC-USD managed to climb $1,100 in value \u2014 a near 60 percent growth. Shortly after reaching a local high in the mid $2,900s, it immediately retraced down to the mid $2,700s where, at the time of this article, it is currently sitting. Is this price growth sustainable? Is there more bull left in this rally? I\u2019ll attempt to break down this recent market move from both sides of the fence and show why investors should or shouldn\u2019t be wary of a move of this magnitude. <\/p>\n

Full disclosure: This analysis will not attempt to speculate on the value implications within this ongoing scaling debate. This will be an objective, raw analysis of the data at hand.<\/em><\/p>\n

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Figure 1: BTC-USD, 12-hr Candles, Bitfinex, Macro Bull Run<\/em><\/p>\n

If we put this entire bull run into perspective, we see that upon the completion of the Head and Shoulders Reversal Pattern<\/a>, the market retraced down to the 50 percent Fibonacci Retracement values before ultimately bouncing and immediately climbing toward the previous all-time high.<\/p>\n

At the moment, BTC-USD has yet to see any significant pullback from its latest move to justify any semblance of considerably strong support. The importance of establishing support levels is crucial for a sustained, healthy bull run. A support level sends out a signal to investors that basically says, \u201cHey, the market is not likely to drop below \u2018x\u2019 value \u2014 your risk is lowered by buying at \u2018y\u2019 price.\u201d <\/p>\n

However, without these firm support levels, investors don\u2019t know where the price currently stands in the grand scheme of the market. Thus, uncertainty can be injected into the market even in times of strong bull rallies. This uncertainty often leads to early profit taking, panic selling and long-position capitulation (also known as a \u201clong squeeze\u201d).<\/p>\n

To play devil\u2019s advocate, one can make an argument for a bullish continuation of yesterday\u2019s massive bull run:<\/p>\n

<\/figure>\n

Figure 2: BTC-USD, 30-min Candles, Bitfinex, Price Consolidation<\/em><\/p>\n

If we take the current trend out of the context of the entire market, it would appear to display characteristics of a bullish continuation pattern known as a \u201cBull Pennant.\u201d Bull Pennants are characterized by having lower highs, higher lows and decreasing volume along the length of the pennant. A pennant of this magnitude would have a price target somewhere around $3,400. (For the sake of time, I won\u2019t explain why that\u2019s the price target. You\u2019ll just have to take my word for it.) <\/p>\n

However, when we put the Bull Pennant into the context of the entire market, we see signs of market divergence starting to form on the higher timescales:<\/p>\n

<\/figure>\n

Figure 3: BTC-USD, 4-hr Candles, Bitfinex, Bearish Divergence<\/em><\/p>\n

On the 4-hr MACD, we see bearish divergence during the market move to $2,900. Divergence is an indication that the market has begun to lose momentum and is likely to pull back before any more uptrending will continue. <\/p>\n

In regard to a bullish continuation of this rally, something to keep an eye out for are the tests of the key Fibonacci Retracement values shown in Figure 1. A retest and strong rejection of the Fibonacci lines will show strong market confidence in the eyes of investors who are currently sitting on the sidelines. Before any sustained, healthy uptrend resumes, the market will have to prove itself at the lower values to establish firm support.<\/p>\n

During massive rallies it\u2019s important to always keep in mind that large price movements often come with a large cost. It is still unclear what the immediate future of BTC-USD will be, but it\u2019s important to remain levelheaded when entering trades and always look at the market objectively. <\/p>\n

Summary:<\/h3>\n
    \n
  1. Over three days, the BTC-USD market gained 60 percent in value.<\/li>\n
  2. No firm support has been established to justify remaining at this price level.<\/li>\n
  3. Because there is no firm support, volume is beginning to taper off while the market decides the next direction to head to next.<\/li>\n<\/ol>\n

    Trading and investing in digital assets like bitcoin and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

    Over the course of three days, BTC-USD managed to climb $1,100 in value \u2014 a near 60 percent growth. Shortly after reaching a local high in the mid $2,900s, it immediately retraced down to the mid $2,700s where, at the time of this article, it is currently sitting. Is this price growth sustainable? Is there […]<\/p>\n","protected":false},"author":3439,"featured_media":20746,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[345,2069,468],"class_list":{"0":"post-23461","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-price","9":"tag-price-analysis","10":"tag-trading"},"author_data":{"id":3439,"name":"Bitcoin Schmitcoin","nicename":"bitcoin-schmitcoin","avatar_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/12\/cropped-bitcoin-schmitcoin-promo-image-1-2-96x96.png"},"featured_image_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/11\/bitcoin-price-analysis-new-highs-are-nigh.jpg","_links":{"self":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/23461","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/users\/3439"}],"replies":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/comments?post=23461"}],"version-history":[{"count":0,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/23461\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media\/20746"}],"wp:attachment":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media?parent=23461"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/categories?post=23461"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/tags?post=23461"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}