When we last posted 24 hrs ago, the bitcoin market was flirting with $85 as it retested long term rising support as resistance. The great news for bitcoin holders is that while - as we suggested - the rally was likely to falter at these levels, selling pressure hasn't been sufficiently strong to send the market back in the other direction.
Here's the chart:
In fact, what we see at Point A is that having pierced this first line of resistance, it is already acting as support. Put another way, new buyers - anxious to join the rally - are placing their limit orders against it; this bullish indicator suggests that the market should continue to push up to at least $92 over the next 24 hours (heavy green arrow).
What happens then is impossible to know but we would caution that the confluence of horizontal and descending resistance at this price point carries the risk that sellers could overpower buying pressure in this area sending the market into reverse, albeit to a higher low.
Having said this, the market seems for the moment to have completed the first phase of a major trend reversal; it has made a bottom, retested it and pierced a major zone of resistance. Now bitcoin holders need to see more of the same.
In the meantime, anyone keen to jump into the market 'long' has two options:
1. At market down to $85. This is the higher risk option which assumes the rally will continue. If it does you may have jumped on the bus at the last stop. If, however, other buyers don't continue to join in, this rally will falter and your trade could quickly be underwater.
2. Wait for $92 to get properly pierced and enter on the retest or first pullback thereafter. The advantage of waiting is increased certainty that the major trend has indeed reversed and you have achieved a value purchase within this revised context. The disadvantage is the risk that having pierced the final band of resistance the market bolts North without looking back, in which case you will be kicking yourself for having missed the bus altogether.
It is an inescapable fact that 'certainty' can be an expensive commodity in any financial market, and bitcoin is no different.
In the meantime, bitcoin holders needing to liquidate to fiat in the next 24 hours can sensibly risk moving their orders up to around $91. If, however, these orders have not been triggered by the end of the period you will know that the rally is faltering and should consider getting out 'at market'.
In any case we shall post again at this point to update our advice.