Sunday, 9 June 2013

BTC Update Monday 10 Jun

As noted at our last update, a Bitcoin sell-off looked to be gathering momentum and sure enough, we blew straight through $100 to re-test that long=term rising support level at $90.

This is what it looks like on the Daily Chart...

From an investment perspective this puts Bitcoin right back at 'fair value' in the context of the long-term up-trend; put another way, Bitcoin is a bargain right here and the nice rejection of $90 ought to give investors the confidence to jump right in.

So does this mean we are out of the woods yet? Well, we can never 'know' the future.  It is entirely possible that the value of Bitcoin could continue to fall, but what we can see in more detail below, is that there are gathering technical (read psychological) reasons for buyers to come in at these prices and sellers to either take profit or at least stop selling.

The combination of these pressures has already driven price off the lows to retest old support as resistance and we may well close the day above the price at which we opened it.

So, how should more active traders play today's market?  Well, merchants needing to convert to fiat today should place their limit orders at $104 as this is where the bull traps will be lain.  If prospective Bitcoin bulls aren't already Long it makes sense to wait until the resistance band between $104-106 is first defeated, then re-tested as support.