by Jamie Holmes
Bitcoin's ongoing long-term uptrend against fiat currencies intensifies as the SEC's decision on the Winklevoss ETF approaches. Depending on the capital of the ETF, the bitcoin price could surge as high as $1,700 if the ETF attracts $1 billion which aligns nicely with the long-term structure of the market suggesting a peak in the current upswing just above $1800 for 2017.
A close higher than $1119.80 by Monday February 27 now looks highly likely, breaking the resistance provided by the lagging line. With the Ichimoku indicator no longer giving us any higher resistance levels, we have to turn to psychological level $1250 and $1500 as potential targets in the long term.
Moreover, we can use Fibonacci ratios to determine where the market is headed next. If bitcoin remains above $1163.00, we should see bitcoin wander towards the first Fibonacci extension level at $1829.20 over the long run. $1829.20 is the 161.80 percent extension level with regard to the upward surge from $85.00 to the next fractal level at $1163.00 in late 2013. Therefore, this resistance level should be a target for buyers.
Since the market posted a session low at $465.28 in August 2016, the market has gone onto to establish five near consecutive higher highs on the monthly timeframe. Consequently, we expect at least another five near consecutive higher highs, suggesting the long-term uptrend may run out of steam around September 2017, peaking around $1829.20.
According to Fibonacci analysis, we are now witnessing upward continuation of the long-term trend. Notice the Ichimoku cloud also signals for the first time the beginning of an upward trend, as it has only recently turned green in color, shown below. Momentum is also favourable for the market to go higher, with the Awesome Oscillator pushing toward fresh highs and the conversion line (blue) remains on an upward climb.
Further bullish confirmation will be given once February's candlestick, shown below as a bullish Marubozu, closes. For BTC-USD to appreciate further, a close higher than $1163.00 is required whereas a close below this fractal level will see the market move toward the $1000 handle.
The 4-hour price action below shows support will be found at $1157.32, the conversion line (blue). A close below the conversion line will point to short-term downward momentum with further support zones found around the base line (red) at $1119.15 and the Ichimoku cloud around $1040 to $1020 at the time of writing. Limit buy orders are suggested anywhere around these two zones to get in on the ongoing uptrend.
The short-term outlook is illustrated below by the 15 minute price action. The flat Ichimoku cloud suggests equilibrium lies just above $1170.00 as European markets open on February 24. The conversion line remains above the base line suggesting momentum will remain more skewed to the upside.
Key fractal levels lie at $1175.00 and $1193.92, providing support and resistance respectively. A break above $1193 will see bitcoin push to key psychological resistance at $1250.00, where early buyers may lock in profits and precipitate a trendless or downward-leaning market. On the other hand, a break below $1175.00 would see the market test the support zone provided by the Ichimoku cloud around $1160 but then rising above $1170.
BTC-USD has already established key supports above $1000, and following the break of the previous all-time high, upward momentum will resume. The green Ichimoku cloud is prevalent across all timeframes suggesting buyers can remain relaxed that bitcoin will continue higher. A short-term correction may ensue, with potential floors around $1170.00, $1157.32, and $1119.80.