February 16, 2018
Overall outlook is bullish in Bitcoin (BTC/USD) as the predominant trend is positive. The trend is defined by the bullish support line that began in March 2017, currently in the 7270 area. The predominant trend will remain positive while prices hold above trend support.
A positive development occurred early this month as prices tested and held at the bullish support line. The hold of support further reinforced significance of the level. Moreover, the hold of support was accompanied by a high volume bullish candlestick pattern on the daily chart, which led to a meaningful bounce.
A bullish signal occurred this week that indicates higher prices in the coming weeks/months. Prices rallied above the upper boundary resistance line of a falling wedge pattern that began in late December, in the 9200 area. The breakout above resistance triggered the bullish pattern and signalled a minimum expected price objective at the high of the pattern, at 17,252. The trigger was accompanied by an increase in volume, which added confidence to the signal.
Outlook is extremely positive and higher prices are expected, as the predominant trend is positive and a bullish trigger of a falling wedge recently occurred. A pull back toward the 20-Day Simple Moving Average (SMA), currently 9089, would be viewed as an excellent buy/add opportunity. Protective sell stops may trigger with a confirmed break below the bullish support line that began in March 2017, currently in the 7270 area.
Conservative and long term stops may trigger with a confirmed break below the February low at 6000.
A potential larger pattern may be developing that could indicate an objective in the 29,000 area. The pattern is premature to outline, but stay tuned for further updates.
Chart: Below is a daily chart of BTC/USD highlighting the bullish trigger of a falling wedge pattern that formed within the predominant uptrend, and the test and hold of trend support that reinforced significance of the level. Target: 17252 is the the minimum expected price objective, which is the high of the falling wedge pattern.
**Please note that Zev Spiro is currently the CEO and head of research at Orips Research. Orips is a leading independent research firm that serves high profile hedge funds, with a focus on technical analysis of equities. Zev is in the process of launching a research product for both institutions and retail traders/investors that will analyze cryptocurrencies.