While it’s true that the Bitcoin, at least in theory, should continue to climb against the USD in the coming weeks and months, we are once again finding some serious resistance from the $300. The most recent rally found resistance around the $296 area to be precise and when we look at the overall movement of the crypto currency through the entire year of 2015, we will see that it’s not the first time this has happened.
Breaking $300 is key
When you look at the chart above, you will immediately notice that we are right now testing the $300 barrier for the third time this year. First being in March and second, slightly higher move in July. It seems that the number 300 acts as a solid psychological resistance level where most of the day traders pretty much chicken out and start pulling their profits, thus lowering the value of Bitcoin.
Third time’s the charm?
It’s interesting to see that in July the buying power was slightly stronger than in March and although it ended with a more serious selling, it can still give us clues what to expect from the current rally. It’s very likely we are going to break the 300 this time around, but will it hold for good? Only time will tell. We can still stay quite positive just by looking at how green our current rally has been. Sure, we can expect some drawback soon, but right now it doesn’t look like it’s going to be anything drastic. Don’t forget the awesome fundamentals that are most likely responsible for the rally in the first place!
Bollinger bands breakout
Todays Bollinger Bands breakout has been “boiling” for a few days now, but prior today the market was moving pretty much sideways indicating that the bulls were simply looking for the right moment to arise.
I had my own long position opened on the 19th of April already, so I guess I was there a little bit early. Nevertheless, the breakout happened and as a result the market is starting to look a lot more bullish once again.
While there is still some room for the pair to gain, I strongly recommend closing your long positions at the moment unless you are aiming for something bigger in the long run. (I am trading mainly on the 1H and 4H charts) It’s very likely the market will pull back around $228 area fairly soon.
$240 is not far
It will not take long for the Bitcoin to test a resistance level at $240,495. At the current rate this should be easily achievable later this week.
A few days after my confident prediction that it’s high time to buy Bitcoin on the 27th of January post, I didn’t pay attention to the charts for days. Now, on the last day of January, I checked the charts again and to my disappointment the price hadn’t gone up at all- instead it came down -$24.. USD and has now decided to move sideways completely unsure of itself. I have a feeling a lot of traders are left clueless of the weird movement because we know for a fact that the first licensed Bitcoin trader is now operational which should mean more trust and interest in the crypto currency.
Of course that alone don’t necessarily have to mean much for the price of Bitcoin, but the technical analysis also indicated a bullish movement. After taking a look at the charts I had to bring down the trend line, because my last one was broken through, and as you can see it’s almost vertical now. Everything else is also showing signs of sideways movement and that usually means a breakout is likely going to happen very soon. Perhaps there is still a possibility that my prediction will come true? It wouldn’t be the first time when my timing is way off.
No Elliott in sight
In my last post about Bitcoin I was fairly convinced that we have entered the final stages of the Elliott wave theory, but looking at the charts today it’s clear that it wasn’t exactly true. The market started going sideways in the last few days of November and continued to do so for an entire week of December until on the 8th of December the bears finally gave up and bit the bulls in the ass hard. As I saw it unravel I tried to get rid of the coins I was holding, but I wasn’t fast enough and my exchanger was no idiot either… So I’m still holding them for now.
Third time’s the charm
I don’t want to sound overly pessimistic here, but there’s clearly a pattern to this. Because of the latest breakout we could very well be seeing Bitcoin test our support level around $320 for the third time. The gap between the last two would mean it’s about to happen…
The candle that closed on the 21st of November is above the one that closed on the 10th of December indicating that we’re moving further down the chart. The green bull you’re seeing at the end isn’t anything significant, it’s just showing us that the bulls are here and aware of what’s happening. Not sure if they can do anything about it at this point.
Elliott hasn’t gone anywhere… yet
Right now the 5th wave of Elliott can still be seen and I believe we will see it down the road. The question is when? The bearish candle that closed on the 10th makes a pretty good starting point, don’t you think?
Riding the bulls
The last few days have simply been amazing. On the 9th of November I published a short article about the bullish movement of Bitcoin and just three days later the price has reached $400 USD.
So what now? If you look at what happened on the 11th and 10th of November then you can see a great struggle between the bulls and the bears. The market was unsure how to react, but it is clear to everyone now that bulls have won this battle. At least for the moment.
Depending on how today’s candle will close we might see another one, perhaps a bit smaller to form tomorrow.
The only thing that bothers me is the RSI which shows that we are reaching the overbought market condition very soon. When this happens you can expect a short price decline all the way down to $360 area, but it’s unlikely to hit that low.
Why? Because not only did the Thailand mining rig burn down, the FBI closed a ton of hidden services recently which means that a great portion of Bitcoin users just lost their Bitcoins. This should in theory make the crypto currency even more expensive so the bullish momentum might just be gaining its strength to a much higher level that what we’ve seen this far in which case our next stop will be around $440-$450 and upwards!