Those who read our analysis daily will not have been surprised nor, we hope, fearful when the bitcoin market 'fell out of bed' over the last 24 hours. Not only did we suggest this might happen 48 hours ago but we identified the key support points below the market and re-affirmed our bullish bias unless bitcoin traded through $85 and didn't look back.
In the event $85 is thus far providing exactly the support we had assessed it might. Here is the Chart:
While noting that the market is at a key inflection point, reflecting the ongoing retest of long term rising support, this represents an excellent buying opportunity because it offers an excellent risk to reward ratio. Our logic for stating this is that if $85 holds it will likely form the springboard for the next bull run. And if, on the other hand, the market trades through it on power, we will quickly know that the prevailing market sentiment has shifted from bullish to bearish and can take the appropriate action.
This presents us with a classic contrarian trade set up. The most recent downswing will have chased many out of their trades and others will be fearful of buying into what might yet turn out to be a renewed sell-off. BUT, this combination of mass psychological factors always offer the best - and cheapest - trade opportunities for those brave enough to take them. Are you...?