Having taken some time out to mull over the implications of the widening price spread between MtGox and the rest it's time to get back to what we do best. After-all, in the final analysis a market technician has to stay true to the faith that 'price and price action contains everything we need to know about market sentiment'.
So, here goes... The Bitcoin market has been on another rip; we've taken out $120, traded as high as $124, dropped back to re-test $120 as support and it has held.
This is how it looks on the chart:
As you can see the market is oscillating higher within the structure of a rising channel (Lower rising support Green, Upper Trend Channel Line Red). On the one hand we are getting into the upper reaches of that channel, so this is no time to Buy, but on the other, next resistance at $125 is well within reach over the next 24-48 hours and there is a lot of support below the market between $118 and $120. If the market dips back down here BEFORE we test resistance we would be tempted to add-on to our growing Long position.
Looking above the market, Bitcoin holders looking to liquidate or lighten their position in the immediate term should look carefully at $125 as a sensible point in price to do so. There will be sellers up here...
From an investment perspective, you can see that the market could fall as low as $110 without violating its bullish bias within the current context. So long term investors should be looking down at that rising channel support line for rational add-on points in price.
Finally, we wanted to leave you bitcoin bulls with further reasons to be cheerful. A look at this Daily time-scale chart confirms that the bitcoin market has formed a major, classic, technical formation that heralds significant further advances moving forward. Here it is:
The Head and Shoulders pattern is a powerful formation, once confirmed, and this one indicates a potential measured move target of $155, which is coincident with a major horizontal swing point back down the way.
The road here may be winding but...
Reasons to be cheerful, right?!
Happy trading!
Rob @ BitScan
No comments:
Post a Comment