Thursday, 13 June 2013

BTC Update Friday 14 Jun

Of the 3 potential scenarios outlined yesterday, the third looks to be playing out.  Having finally exhausted buying momentum without having tested the next key resistance, Bitcoin sellers have seized the initiative, carrying the market back through previous support between $104-106.

For the moment $100 is holding up but if this level goes you should expect a re-test of $95 in short order.

Readers unfamiliar with market psychology - who maybe hold bitcoin already and are worried about where the market is heading - should take heart from the fact that having made a low, most markets need to re-test that low, at least once, before sufficient participants are convinced of its significance to trade against it.  It is this swing in sentiment that renders double-bottoms and tops such powerful indicators of market reversal points.

As it stands we do not know whether or not the near term low is 'in' or not, but what we can say is that it's entirely natural for the market to want to re-test the low that we have.

This said, investors looking to get into Bitcoin should consider placing limit orders at $95 - or if brave - $90.  I say brave because if this market decides to make a higher low we might not see $90 before buying pressure carries price back to the North.