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.
I underestimated the market
Guess I have underestimated the buyers potential and also the significance of the recent hidden service raid that FBI conducted earlier this week. Just look at that wonderful green bullish candle :) There’s clearly a connection between the raid and the price movement here because last time FBI closed one of the biggest darknet marketplaces and confiscated millions of dollars in Bitcoins the price skyrocketed exactly the same way just a few days later. After they put those coins out for auction the price obviously fell and now we can see the same thing happening all over again. Will they auction these coins as well? Time will tell.
The RSI indicator is showing that the price has moved over the overbought line. This along with the fact that we’ve had a crazy rally means that a price correction is imminent. How far will it fall? There is a very strong support level around the $380 mark, but I highly doubt it’s going to fall that low. A more reasonable target would be the $410-$420 area, where the price may linger for a few days before we have a better chance at entering a long position again. That being said, there’s no reason why you should close your position right now if you’re aiming for something bigger!
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!