Bitcoin Price: Liquid Stability

Hi everyone, it has been a little while since our last market analysis but every now and then we get busy and this week is going to be a tough one for me. Anyway, let’s get to some technical analysis and look at some of the many things that have happened since we last talked. Over the last 24 hours there have been some curious developments on the BTC-E exchange late afternoon yesterday. Market price has settled around $220 but downtrend settlement is here for another sub-$220 run-off.

As for BTC-E, there is unfortunately not much news as to what happened with their systems or their holdings but it most certainly is not good. Anytime that an exchange can have market shifts upwards of 20% is bad and is pretty sufficient evidence that they do not have adequate liquidity for active trading. Additionally, I could not help but observe that BTC-E’s constant flurry of highly volatile price movement is likely indicative of this exchange’s health and these indicators could be warnings; not that the situation is conclusive but I would tread very, very carefully if anyone is trading with significant volume on this platform. Volatility and liquidity issues do not do bitcoin and crypto trading any favors, I can confidently say that anyone in this space would strive for the same professionalism and trading security as the stock markets.

News aside for the moment, let’s take a look a look at the 15 minute chart:

From a technical standpoint, there is unfortunately not much that has happened over the past 24 hours or so other than a slight upward pressure towards the $230 level. Our last market report had similar technical indications though price was slightly higher at $235 and this uptrend may push through back to this level; the range around $225 to $230 has some significant momentum over the last few hours. If traders took advantage of the lower prices about a week or so ago there could be some solid opportunities for short trading over the next few days. That said, the market should move out of this short-term momentum and back into a slight downward trend that was experienced last week.

The recent market momentum and BTC-E circumstances are likely the causes of the upwards trend over the last day or so but market stops and wash outs are likely to happen in the next day or so. I think this will also be reflected in trading volumes, where there will be a solid increase in the number of sell orders relative to the weakening buy orders seen recently. I predict that after the slowdown price will hold at $210 until there are more technical indications; that said, price neutrality is a good place to be for the moment given how close price has been to the support levels. If price drops to $210 or below, there would be a good opportunity to acquire some more coin before an eventual price rebound to the upper support zones.

Today’s word is for the more mathematically inclined, here is geometric mean:

“The average of a set of products, the calculation of which is commonly used to determine the performance results of an investment or portfolio. Technically defined as “the ‘n’th root product of ‘n’ numbers” … The geometric mean must be used when working with percentages (which are derived from values), whereas the standard arithmetic mean will work with the values themselves.”

Tomorrow’s analysis will investigate geometric mean with more depth and beware: there will be mathematics and statistics. Happy trading!