In our last post we advised a buy trade in the $108 area on a reversal against support. Having bottomed out at $108 and change, the market has rallied as high as $114 over the weekend. So far so good...
Here's how it looks on a chart:
Well, as it stands the market is undecided. Volume driving this latest push up hasn't been huge - as you might expect over a weekend - and having failed to push through last week's highs at $114 we are starting to see sellers creeping back into the market. This is telling us that the market could go either way in the short term. While the market may continue to push North, a pull-back is - in our view - equally likely. If we retest but reject $112 as support, bitcoin bulls will take heart and the order flow that follows could see has push higher again in the noisy resistance zone depicted by the pale red box. If, on the other hand $112 gives we could quickly see the market back down at $108.
So, what do you do?
Well, this is certainly no place to buy; that was down at $108. The decision right here is whether to hold or sell. For those needing to convert back to fiat in the immediate future now is a sensible place to do so. Active traders can either pull the plug or lighten up here - or watch how the market reacts against $112 support. Investors and those with a longer term perspective can afford to sit tight for the time being as the first sign that we are moving from uptrend back to range doesn't occur until/unless we trade back through $108 or real energy.
Rob @ BitScan