Bitcoin Price Analysis 2.5.17

Bitcoin Price Analysis 2.5.17

This week, almost all cryptocurrencies went up in price, simultaneously driving up the total market share of altcoins as the combined market cap broke another resistance level. The price of Bitcoin went up too, $1390 as at writing this, alongside Ethereum ($84), Zero Cash ($107) and Ethereum Classic ($7.9).

“Bitcoin dominance is on a major decline. At current growth, the altcoin market cap will exceed bitcoin in the next 2 months.”

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Overall, since July 2013, the market share of bitcoin in the crypto market has dropped from 90% to 60%. At $7 billion, Ethereum broke past the market capitalization of a public company, Square ,which was pretty much exactly where Bitcoin was on 4/30/2016. A plethora of token crowd sales have been raising money for half arsed projects, roping in complacent crypto investors. No one is sure what is going on anymore. What is driving the crypto market?

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After the analysis on April 21, the price of bitcoin continued up to $1250, and briefly retraced to a shallow $1196. This correction on the 1 hour chart did not last long. A clear candlestick hammer rejected lower price and confirmed support. Like all the dips from an $891, it was short lived. For the rest of the week, BTC rallied to $1331 before another consolidation, a continuation pattern that lasted 5 days. As at writing this today, price is now at $1390, has broken out of this range, and is picking up steam for a breach of $1500.

On exchanges however, prices remain decoupled. Trading premiums on Coinbase (US) and BitFinex (HK), Bitstamp (EUR) versus Okcoin (China) is a source of concern. On Coinbase, price has formed an all time high of $1453, while on OKcoin, price is $300 below at $1185 ( CNY 8200). BitFinex and Bitstamp have $1522 and $1403 respectively.

BitFinex withdrawal issues are yet to be resolved, yet its prices lead all other the exchanges. Even though price has registered new all time highs, not everyone is confident about the troubles at BitFinex.

Speaking to Coindesk Vinny Lingham described it as perplexing saying

he fears that investors may be at risk due to the banking issues observed at Bitfinex, describing this as the “reality of the situation” given current information.”

Nejc Kedric CEO of European exchange Bitstamp chimed in,

“the situation is similar to Mt Gox. I don’t believe the current price reflects organic growth, [BitFinex] withdrawal issues could compound, creating a serious issue for the market as a whole.”

But Honey badger keeps going up!
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2 weeks ago, I made this chart above highlighting the trend to expect. The decline to $1142, after a peak at $1228 formed wave B. Waves C move followed, and began to move in 5 waves to the upside. This pattern continues to push up. The first impulse followed by a dip formed the wave 1 – 2 of an expected larger 5 wave move up.

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Price is at $1392 as at writing this, and the pattern unfolded as expected. It resembles the 3 wave pattern rise in March from $751 to $1100. A zig zag after the sharp decline to $751 to form an A, a decline into a B, before a 5 wave move up to complete a C at $1302. The same price pattern is unfolding now, only much steeper, more excitement, euphoria and mixed fundamentals. This pattern is also on Coinbase, Okcoin, BitFinex and Bitstamp on the 12 hr time chart.

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This week, look out for a continued steep wave 3 up, a wave 4 correction pattern, and then a 5. Wave 4 alternates in form and shape with wave 2. Targets here are $1450 for a wave 4, a correction then an even sharper 5 to $1500+.

I am interested in the larger pattern on the 1 day, 3 day and weekly; the medium term which will explore in a dedicated price analysis article soon.

Great analysis by Tone Vayes and CarpeNoctom have targets of $1500, $1600. Overall, there is agreement that price is in unchartered territory, eerily similar to the 2013 run up. Already, the social mood is reflective of valuations.

“No longer a question that the cryptocurrency space is in the midst of a speculative mania. All the classic hallmarks present. Crash coming.” – DCGco analyst

“Bitcoin’s Price is Nearing All-Time Highs, But Market Confidence Isn’t” – Coindesk

“The one thing I know for sure…this crypto “gold rush” is going to make a killer Michael Lewis book one day. I find this “get rich quick” mentality very troubling” – Barry Silbert

This week’s forecast is to sell the top of the spike.

Contact the author at bitcoinmarketanalyst@gmail.com

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