My working chart, showing Bitcoin price candles, grey volume bars, fractal highs(^) and lows(v), trendlines, support / resistance levels, Fibonacci retracement levels, MACD indicator and Moon Phases.

I’ve discussed the use of all the indicators and line studies on my chart in previous articles, particularly this one. The only new addition this time is Moon Phases – note the two white full moons and two blue new moons in close proximity to price.
Moon Phases show the extremes of the moon’s waxing / waning cycle. I’ve included them as these lunar periods marked the last three significant changes in market volatility and / or direction. The latest new moon (yesterday) occured as the Bitcoin price pushed above the previous high. I consider that a show of bullish strength so added to my position. With any luck, the moon will bring increased upwards volatlity and volume into the market. For more on Moon Phases, including some research on their effect on markets, check out ChsaDos’s chart / info.
If you look closely at the short white horizontal bar I use to indicate my buy-in price, you’ll notice there’s some data missing. That short green candle was a long green candle last night, clearly pushing through the dashed yellow line marking the previous high. The correct Bitcoin price action can be clearly seen on the BitcoinWisdom Bitstamp chart below:

BTCUSD Daily on BitcoinWisdom – it’s wise to always have a backup chart and even a backup exchange when trading.

If you remember my trading plan, you’ll note that I’ve deviated from it to add to my position at a much lower price than originally intended. This is because my view of the market changed after considering the Bitcoin price cycles dervied from the Mystery Chart:

Bitcoin price peaks in green, surges in blue and sideways / down in red. Handy annotations predict the future!

Since recovering from the December low around $382, price has been steadily grinding higher in a shallow uptrend. Given the price cycle chart above, I am no longer confident this uptrend will bring us to a new all time high (ATH) until the next bullish blue block in May.
The current uptrend would bring us to $1000 before February, but without a massive influx of fresh money accompanied by plenty of positive media hype (a fresh bubble, in other words), I’m less optimistic that price will smash through four digit resistance, never mind set a new high any time soon. Anticipating a swing down from the significant fractal high at $1000 or ATH at $1163, I’m buying in now and setting my sell targets below those levels. Of course, institutions or nations buying up Bitcoin in volume could trigger another bull run before May. If such major positive events occur, I’ll hold my position longer.
My play now is to add the final part of my position on a convincing break of $800. This level (~$900 on Mt. Gox) has presented frequent Support / Resistance over the past couple of months. I will also have to move my stop loss closer and start trailing it to lock in profits. I’ll publish any such moves in chart form over on my Trading View profile and discuss my reasoning in depth here on CCN.
Interestingly, from what I observed in the market around the time I added, Bitstamp led Mt. Gox above the previous fractal high (made on the 28th of December). According to Bitcoin Average, Bitstamp and BTC-E both currently enjoy more volume than Gox, so it makes sense to chart their prices (which tend to be close) rather than the Gox price with its withdrawl-risk premium. Of course, it’s also smart to keep an eye on what China’s doing…
Finally, I must mention the recent stellar performance of Peercoin! As of the time of writing, it had reached a high of $7.50, massively outperforming Bitcoin and Litecoin (which is shadowing Bitcoin pretty closely) on a percentage basis. Namecoin is also doing very well, although I’m less excited about this (probably because I don’t own any).

Bitcoin, Litecoin, Peercoin and Namecoin.

Whatever’s behind their rise, it’s good to see the innovative altcoins getting some love from the market!

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