Thursday, 8 August 2013

Game On for Bitcoin!

Okay, so the breakout we predicted 14 hours ago has occurred and as predicted, the first impulse was down.  As we also predicted, support has come in at $101.  What happens next will define the next few weeks.

This is how it looks on a chart:

In our last post we speculated that an immediate counter-reaction below the consolidation box might tempt us back into the market long.  As you can see, that didn't happen as shorts drove price through rising support on volume to re-test horizontal support at $101.

What we are currently witnessing is the bulls' counter-attack, mounted against that support level.

If the bulls can drive price back into and through the consolidation box, this will be a very bullish indication of a counter-move back up to at least $112.

If, on the other hand, they fail, support at $101 will not be anything like as strong at the next test and is likely to give, paving the way for a further drop to $97 as bullish sentiment collapses.

So, what do you do?

Well, if your bias is bearish you sell right here against rising support, now being tested as resistance.

And if you are a bull you can either buy here - and cross fingers that we make it back to $108 swiftly - or wait to see if we do.  Either way your loss stop needs to be positioned just below $100.

Like we said at the top, it's decision time for bitcoin and while we cannot predict the outcome of the ensuing battle, we can cue your eyes onto the key levels.

In the meantime, it's game-on and the moment to trade with the courage of your convictions.

Good luck.