BTC Update Friday 16th August - The Correction we Anticipated

As we cautioned in our last post, resistance at and above $112 was never going to be an easy nut to crack at the first concerted attempt and that's exactly what we have seen.

Here's the Chart:

As attentive market watchers will have noted, bitcoin traded as high as $114 on MtGox, before falling back below resistance. Since then we have dropped away on low volume as more and more late entrants chicken out of their trades at a loss.  Too bad; they should have followed BitScan ;).

Okay, enough bragging from me. What you want to know is what is most likely to happen next...

Well, we like a buy on a rejection of support at around $108.  If the market turns from above this level we will put it down to experience, but logically this is the level at which the positive order flow is likely to be strongest.

This doesn't, of course, mean that $108 will definitely hold if challenged - only that we need to give it a chance!  And if it does give... and we find ourselves gathering momentum, then we'll take a step back a re-assess.