Bitcoin’s price is approaching a key mark, from which the long-term growth could continue. What is the market sentiment at the moment? Is Bitcoin’s price cheap, compared to the long-term trend?

There was no turn to decline yet

Right before the 11th G20 summit took place in China, Bitcoin’s price went up by almost 10%. Many experts have noted that the yuan is unlikely to escape a new wave of devaulation in 2016. It seems that such news provokes investors into taking up new instruments to diversify.

Also, one of the large cryptocurrency trading companies - BitKan - is determined to enter the US market in September this year. The company managed to secure more than $1.5 mln worth of investment in April 2016. BitKan has managed to gain more than several million clients already. All that could lead to growth in the trading volume.

Right now, Bitcoin’s price is forming within a long-term correction towards the upward trend. BTC has reached an important level. Similar situations have happened before, and they weren’t rare. For example, the most recent powerful growth, which happend in late May this year, occurred in a similar situation. But there is always an alternative scenario - the continuation of a long-term downward correction.

BTC/USD chart

When one looks at the traders’ buy and sell orders it becomes clear that most deals have been opened with an upward trend in mind. There are about 40% more buyers than sellers on the market right now. That’s why, judging by the delayed orders, the overall situation is more or less positive.

But we need an additional confirmation. We need to see the traders’ reactions at key levels. The level of $615-20 is important for the upward movement. Large sell volumes intersect with two technicals: a diagonal channel and a 50% Fibonacci retracement. An accumulated volume confirms the importance of these technicals. That’s why there is a good chance for Bitcoin to stop near that mark. If most traders start buying Bitcoin at that mark, there will be a fortification. In that case, and if it is followed by a turning wave, growth could begin. The scope of that growth could likely lead to the continuation of the long-term upward trend.

BTC/USD chart

In regards to the downward direction, the movement is so far restricted. There was no turn on the large scale. The downward correction has stopped at a large level near $500. That level is the most likely peak of a long-term upward trend, which has started at $200. That’s why that rebound is almost over. The key point for a downward turn will be the accumulated volume at $520. If the majority of traders manage to hold the price by selling at that mark, the chances of a fall to $450 will be increased.

The level of $520 could also serve as support for an upward trend; the price could rebound from it, and form at least a wave of a flat towards $615.

So, in order to make a conservative buy or sell decision on Bitcoin, we need to wait for traders to react to key levels.

For a more protracted growth to begin, Bitcoin has to fortify and form a turn at the level of $615-20.

For a more prolonged fall, Bitcoin’s price has to hold its positions and form a turn at $520.