Today has been a good day for Bitcoin traders as China is leading the latest pump of over $20 in the last 12 hours resulting in the current price of $387 on Bitstamp.
In our last bitcoin technical analysis, Traderman ended the report with the following sentence:
The market has started to print lower highs since the end of January. This indicates that pressure is building in the market as price is compressed against the support area at $363. These sort of formations usually resolve themselves with a very violent break!
Today’s market action confirmed the anticipated break, multiple technical indicators such as positive divergence discussed here and the triple bottom which formed right before the pump signaled this trend reversal. A triple bottom pattern is usually used to predict the reversal of a bearish trend, in our case the bearish trend started at the beginning of January when we hit the $350 low.
Chart from bitcoinwisdom.com
While it’s true that we can find technical indicators which coincide with today’s pump, the general opinion on reddit is contradicting. sierradreamz from r/BitcoinMarkets said:
I’m shorting this BS settlement manipulated pump just like the last couple of them. This was most likely just an artificial jacking up of the price and unless there’s a lot of follow through due to technicals and FOMO (Fear of Missing Out), we will be back in the 370s by the weeekend. Of course anything is possible, but that is probable, which is where I’m placing my bets.
A few users seem to agree that this recent price hike is artificial, comparing it to last month’s pump from the $370s level right up to $420. It took 12 hours on January 20th to pump the price from a low of $372 to a high of $422, on the way down it took only 20 hours for the market to crash right back down to $375.
Chart from bitcoinwisdom.com
If this is another attempt at a pump then this time the price will definitely not reach $420 because people will take profits earlier and hopefully not fall victim to fomo trading. Furthermore, after a such prolonged and brutal bearish trend buyers are less likely to take a risk and buy at current levels. Do you think that this is an artificial pump or true market movement? Take a second to answer the poll below to see what others think.
If you are currently holding a position it is important to watch the market. The next OKCoin futures settlement will happen in 7 hours from the time of this publication, you can checkout a timer for the next futures settlement by exchange here. Seasoned traders know to take into account OKCoin’s weekly futures settlement time as more price swings can come when the contracts close.
To show the importance of OKCoin’s futures settlement times here is a chart provided by the user Bitcoin_Markets from reddit 2 months ago:
9:00 is settlement time, as you can see that is the moment when the price started rising and made gains of over $15 in a matter of 2 hours. While the market doesn’t move in such a way each Friday at 9:00 o’clock, futures settlement times should be taken into account as the market will have a higher tendency to make moves.
Chart from bitcoincharts.com
The current RSI is 67.75 which is the highest its been this week, and the current OBV is -23.37 which is also the highest it’s been this week. Current targets are $385 support and $395 resistance. If we break down through $385 then we may see the price free fall right back down to the pre-pump $370 levels. On the other hand, if we breakthrough $395 bitcoin may see the $400s again.
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