NYXBT Bitcoin Weekly Chart

Bitcoin prices are all over the map and different exchanges report different prices. Bitcoin popped to near 20K on the Coinbase exchange last week and then retreated to 15K. As this is typed, bitcoin is up +16.666% to 17500.

The bitcoin saga begins in 2015. The standard deviation bands squeezed in tight (purple arrows) predicting big moves which happened to be higher. Tight bands do not predict direction only that a huge move is on tap. Bitcoin proceeds merrily along with higher highs and goes parabolic beginning March of this year.

Bitcoin price peaks in August with overbot RSI and stochastics, the bearish rising wedge pattern and negative divergence with the RSI, stochastics, ROC and Williams. This told you that bitcoin wants to pull back for a rest. The MACD line and histogram, however, remain long and strong in August so you knew that after a pull back bitcoin would move higher again for another high price and this occurs. Price drops to the September low and then takes off parabolically higher into the present day.

Price stabs up through the upper band so the middle band at 5872 and rising is on the table. There are so many gap-up moves on the chart it looks like Swiss cheese. Someday these gaps will be filled on the downside.

With the higher high in price, the indicators remain mixed. The RSI and stoch's remain overbot and prefer to see price taking a rest going forward. The RSI, however, ekes out a higher high providing more upside juice for further bitcoin highs. Ditto the MACD line and histogram both long and strong. Ditto the ROC. The overbot conditions want to see a pull back but bitcoin should head further higher after any stall move.

The ADX indicates that the price trend for bitcoin was off the charts higher in 2016 (purple box). The ADX prints an unbelievable 70 in June 2016 forecasting strength ahead for the cryptocurrency and the higher highs occur. Note, however, that bitcoin continues higher but the ADX is at 62.44 off the high at 70-ish 18 months ago. Thus, despite the parabolic spike higher in price, the trend higher in price is not as strong as in 2016. The trend is the strongest of this year, however.

If you are banking on bitcoin heading ever higher, watch the ADX since you will need it to surpass the elevated 70 level to prove the trend higher remains strong. The overbot conditions want to see price move lower in the near term but higher highs are expected going forward. Looking at the monthly bitcoin chart, the RSI, stochastics and Williams are overbot but the RSI is squeezing out a higher high, the MACD line is running vertical and the ADX trend is strong.

The monthly chart points to higher highs in bitcoin into the early new year. This does not mean parabolic moves continue. Price may simply idle sideways with an upward bias for several months forward.

The weekly chart hints at choppy trading ahead with fits and starts and bitcoin squeezing out new highs on the weekly basis but this may run out of gas over the next month or two. Bitcoin price would be expected to fall on this weekly basis say somewhere into the 6K to 10K range but then likely recover again to the current highs since the monthly chart is strong.

Keystone does not have a position in bitcoin. One trading idea is to simply let bitcoin burn itself out over the coming 2 to 6 weeks and buy that pullback when it occurs since the monthly chart remains strong. Bitcoin price is at 16657. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.