The Taxman Cometh! Bitcoin Price Analysis for 9/April/2018

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Highlights

Today bitcoin (BTC) continues to languish within its most recent corrective range of $6,300 – $7,000 and a birds eye view of the daily chart shows BTC trading within the descending channel. At the moment the most commonly accepted explanation for BTC’s malaise is the April tax season in the US and UK causing accelerated selling as investors organize their affairs and prepare to pay capital gains tax on their earnings.

Generally, sell volume has been higher than purchasing volume and it appears that speculators have gone elsewhere for the moment.

Mild price growth has distanced BTC from its recent swing low of $6,425 on 6th April, but continued worldwide regulatory events and US tax day on April 17th could negatively impact BTC and trigger a revisit to April and February lows.

Fortunately, there are tidbits of positive news that bode well for BTC’s future prospects. The Securities and Exchange Commission (SEC) is reconsidering applications for BTC exchange traded funds (ETFs) and Rockefeller’s venture capital division ‘Venrock’ has partnered with Coinfund. George Soros also indicated that Soros Fund Management has approved plans to trade cryptocurrencies and similar whispers are being heard from Rothschild. The fact that the investor aristocracy has embraced cryptocurrencies can be interpreted as a huge positive and it is likely that other institutional investors will follow suit.

 

Daily Chart

 

At the moment BTC has support at $6,300 – $6,500 and is struggling to overcome resistance from $7,200 – $7,500.

After crossing $7,500 BTC will encounter a psychological barrier at $8,000 and further levels of resistance at $9000 – $9200, $10,000 and $11,200.

 

4 Hour Chart

 

Today’s 4 hour chart shows slight flattening of the 50-day moving average (MA) and possible upward momentum for the 20-day MA which may signal that a reversal could be in order, but in the event of a reversal there are still many resistance levels to overcome.

Similar to last week, BTC continues to trade within a descending channel but gained slight momentum on April 6 – 7 and spent the day above $6,800. At the time of writing, the 20-day MA has curved upwards and with a RSI at 54 it is possible that the 20-day SMA and 50-day MA will cross, opening the door for price growth to $8,000.

 

 

The MACD crossed on 7th April and spent the next 2 days trending upwards, indicating bullish momentum.  

BTC still needs to move past $7,500 to gain further upside momentum and suggested trading strategies have not changed since last week’s post.

 

Vision

  • BTC may continue to trade within the range of $6,300 – $7,300 and needs to trade above $7,500 to gain upside momentum.

 

  • It is still unclear whether BTC has found a bottom but buyers and volume have returned each time BTC dropped to $6,300.

 

  • BTC needs to close above $7,000 to maintain current momentum.

 

  • Tax events occurring over the next 3 weeks could cause BTC to revisit April and February swing lows.  

 

  • Currently (11:00am, GST), BTC is trading at $7,130 and attempting to retest the neckline of of last week’s double bottom. Prices could rise to $7,500, opening the door for continual growth.

 

  • Alternatively, BTC could meet resistance at $7,300 and $7,500. Stay tuned for updated charts as the day progresses.

 

 

Disclaimer: The views expressed in this article are not intended as investment advice. Market data is provided by BITFINEX. The charts for analysis are provided by TradingView.

1 Comment
  1. Ravi Halai
    Ravi Halai 1 month ago
    Reply

    Great price action analysis!!

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