Quadricolor

BTCUSD found resistance congestion, potential range scenario.

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
Looking at recent events major support and resistance is forming up. The fundamental aspects of bitcoin are looking a bit more gloomy than the technical aspects. The mempool size is still at record levels around 120 000 000 bytes on a 7 day moving average, there are still stubbornly high unconfirmed transactions around 178 000 thought the average confirmation time is down, the 7 day average is still around 3 hours. These indicate a very high transaction volume of actual bitcoin on the blockchain network. Coupled with the fact that the price has consolidated, points to a picture, not of buying but of selling, as volume is up but price is down. Also the news from South Korea has dampened expectations.

Moving to the technical aspects, the price is finding a support area around the 12000 handle, down to lows of 11180. We also have the 100 day moving average providing some support after the 55 day MA was broken. Coupled with very low RSI indicators, this may be a support level forming. The lowest support may be provided by the 200 day moving average, if this gets broken prepare to short as I believe this may indicate the end of the bitbubble. However I will be looking for further confirmations from the fundamentals aspects to converge.

Further up there could be resistance found at 17300 (resistance one) and then 20000 (resistance two), 20000 should provide the strongest resistance. Again I will update with fundamentals if and when these levels are close. Early warnings are being formed by the lower high, to watch out for. The key lower low that indicates potential trend change has not formed as the same support area has held up, but we watch this closely.

To move forward, there is clear price pressure here. A range may form under fundamental pressures from the congested blockchain. If this was to occur, buying around these levels (12150) is warranted placing stops at 10500 to 10000. If the price moves up then move the stop to the entry price and take profit one will be around the resistance area one, take profit two around resistance two and the third take profit is kept in case thing improve and price breaks past the resistance with fundamentals easing and trend continues up. However the picture paints a scenario of ranging conditions – neutral.

Looking forward my favoured trades will be hunting for the tops. Depending on other aspects closer to the time I may be selling at the two resistance areas, or close by, again this depends on the network and other analysis closer to the time.
Comment: Lower resistance has been breached, My stance has changed from neutral to bearish. A lower low will now form and the up trend will have ended with potential for a down trend to start.
Comment: Fundamentals are improving, network congestion is easing and I've updated my analysis here with buying opportunites:
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