Trader outlines likely Bitcoin price trajectory

Practicing trader and founder of the Crypto Shaman project, Vadim Shovkun, explains the current market situation.

Bitcoin remains in a tight range. Despite the predictable pullback in equities and a highly volatile economic environment, the first cryptocurrency holds its ground and presses toward $17,600 without breaking it.

BTC

There is little point in analysing Bitcoin on a time frame below the daily, as the tight range yields nothing of interest.

On the daily chart, several interesting features have formed.

There has been an uptick in volumes in recent days, as well as a rounding and a gradual rise in volumes over the last three months. The price is pressing against $17,600, generating substantial volume, but there is no result. This bodes ill for a decline from current levels.

Compare the bars for September 27 and September 21. Both have upper wicks; the body of the later date is smaller, but volume is higher. Volumes are rising, so a hidden buyer is likely lurking in the September 27 bar.

Another comparison of adjacent bars—27 and 13 September. The spread was abnormally wide, with high volumes. Yet on the 27th the spread was tiny, with higher volumes. Another sign of a buyer.

The HL&HH structure: over the last week, a clear micro-range structure has formed with rising lows and highs.

S&P 500

Studying the S&P 500 index, a double-bottom pattern appears plausible. Comparing the volumes that formed on previous rebounds with the current ones, any rebound, if it occurs at all, is likely to be modest.

Conclusions

The stock market has carved out a summer low, and Bitcoin is holding. Large volumes are being generated on the first cryptocurrency, but declines are not occurring—everything is being absorbed by buyers. The stock market may also see a small rebound in an attempt to form a double bottom.

With Bitcoin trading in the $18,400–$20,400 range, the outlook is flat. Reaching the top of the range at $20,400 would inject optimism, drawing the accumulated volume toward the $23,000 area. A move to $18,400, however, would break the HL&HH structure and send the price to fresh summer lows.

But even if it reaches $23,000 within one to three weeks, a move below $17,600 is expected. This is supported by a volume-less rebound in equities, and sentiment analysis.

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