Bitcoin price surges to $260: too far, too fast!

A spectacular rally has pushed the price to $260 (Bitfinex) and 1638 RMB (BTC China). At the time of writing, the parabolic rise has begun to turn downward, probably due to profit-taking. This wave seems to be at the familiar terminal diagonal top, that is, a series of small gradual rises.

Bitcoin Price Analysis

Bitfinex 15-minute chart

From xbt.social report earlier today:

The $258-$260 target zone could be the final destination for a gradual tail end diagonal, otherwise - if the market finds the motivation to move up another leg - we could see prices run all the way to a target near $270. The latter target level is also the 4.618 golden section extension level, while the $258 target is the 3.618 golden section extension level - a more common target area.

This surge happened quickly and may have been “too far, too fast.”

Although we acknowledge the expectation of rising prices and can give evidence, we should at least be prepared for the worst, that is, the big wave of rising prices from $230 to $258/$260 may reverse. This result is the conclusion drawn from the following chart:

The daily chart shows where our current swing is within the larger picture.

Bitfinex 1-day chart

~The highlighted labels have been placed at the locations of two potential similar price patterns. The uppercase ABC labels count the larger waves in the Bitcoin chart, while the lowercase "ABC" marks the local corrective structures. The labels are for comparison purposes and do not mean this is a valid wave count. But if this is indeed a pattern that will recur, then we can see prices fall to at least $230.

A continuation of the rally or a return to consolidation are both possible scenarios. Having pulled back strongly, it seems unlikely – but not impossible – that another pullback will occur.

Once the price breaks above the 200-period moving average (red) on the daily chart, we will confirm the continued upward trend. The following conditions are met, which means that the decline is expected: (a) once the price line completes the top pattern between $258-$260, accompanied by the RSI indicator divergence on the 4-hour chart, (b) the 4-hour MACD line will cross below the signal line, indicating a decline.

Predictable futures that are destined to occur should not be viewed as fixed outcomes, but rather as possibilities that can hopefully be viewed as probability distributions based on insight into their respective likelihoods. – Howard Mark

Summarize

A spectacular move higher, but it is doubtful whether it is a big move higher. The price leaves a controversial range on the chart, in a hurry, but it may have gone too far too fast, and a small pullback is very likely. Another new high cannot be ruled out, but the indicators on the chart have been pulled to the extreme position of the chart of all periods below the weekly line. If you are not an ungrateful person, you will say: Thank you, Bitcoin.