In yesterday's update we forecast a re-test of $112, identifying it as a significant swing point above the market.
In the 24 hour period that has followed - and as equity and debt markets melted down around the globe - Bitcoin has behaved as we anticipated. Here's the chart...
As you can see, we have been hammering away at $112 for 12 hours or so but we haven't yet traded through it, let alone held above; as we said, this price point represents significant resistance. So, what does this tell us about what might happen next?
Well, from a purely technical perspective you would have to conclude that the market is making hard work of getting through this psychological boundary; if it doesn't achieve this soon, momentum may swing back in favor of the sellers, in which case a revisit to recent support would be inevitable.
On the other hand, while $112 is proving a tough nut to crack, it hasn't managed to send sentiment into reverse - after 12 hours of trying. In addition we have to consider the deepening global financial panic swirling around this market, which is all pro-Bitcoin from the safe haven/store of value perspective.
When viewed like this, it is difficult to imagine that the market won't just grind through this level and the next band of resistance - on its way bak to $120. It may not look pretty and we may well get buffeted back down to re-test support on the way, but against the ongoing financial turbulence we would struggle to advise any liquidation of Bitcoin in favor of Fiat currency unless you absolutely have to.
- As an aside, should any of you wish to host a Bitscan analysis widget on your own site, you'll find one off to the right.