BTC Update Thursday 11th July

The good news for bitcoin bulls is that the market rallied throughout the US session and is currently challenging old support as resistance.  The less good news is that as we noted yesterday, the barrage of sell orders above $85 has - for the moment - stopped this advance in its tracks.

Here is the chart:

As you can see, we are currently holding right on the ascending resistance line having traded as high as $88.  

Holders of bitcoin can take heart from the fact that the market is finally displaying a degree of bullishness.  Yes, we are currently seeing sell orders triggered at resistance but this was always going to be the case and it doesn't change the fact that the market is showing signs of life.  Even if resistance is rejected at this attempt, there will be less sellers waiting for it at the next.

Does this mean the bear trend is over?  Well, in our view it really is too early to say.  Statistically, it is most likely that this first attempt to pierce resistance will ultimately fail somewhere between $85 and 92, triggering another swing to the downside as the market establishes a range.

Having said this statistics in this case represent no more than a balance of probabilities.  It remains entirely possible that the current wave of renewed buying will power through this resistance band at the first attempt if it is powerful enough - and this would be a really bullish sign.  However, even if it does we would caution against buying into this first rally and instead trade against these levels once re-tested as support, as this would represent a value purchase within the context of a confirmed bullish upswing.

Finally, for those holding but needing to liquidate bitcoin right now - and if you haven't sold already - the safest place to exit is where the market is currently trading.  This advice is based on the fact that if you cannot afford to wait you should always act on the most likely outcome within your time-scale as this will prove the most most profitable strategy over time.