So in our last update we were seeing sufficient weakness in the bitcoin market to conclude that a deeper pullback was more likely than continued strength. We felt that a break back through $130 to the downside could cost the market another 5 bucks at least.
In the event the downside break never happened and eventually the buyers came back in, nudging the market back up to retest resistance at $145. As a result we never got an opportunity to add-on to our long position at the wholesale price that $125 might have represented. Never mind...
Anyway, here's how it looks on a chart:
This latest bull run is significant as it's broken through descending resistance, which paves the way for another run at the most recent top of $148.
As usual our advice would be that it is too late to jump onto this rally right here as we are, again, stalling in a well established band of resistance. For this reason the odds of a pull-back are statistically greater than those of continuation. Having said this, if such a pull-back were to re-test anything around $140 - we might well see a bullish rejection as sufficient buyers climb aboard in anticipation of a definitive run at the top, which at the third time of asking may well be successful.
For this reason we will be watching the confluence of support at around $139-140 very carefully over the coming days...
Looking longer term, it is - of course - possible that this rally finally breaks down definitively before breaking out into relatively virgin territory, but based on what we see right now, the market looks to be gathering its skirts for another run North and trying to pick a top or bottom has never been a wise strategy. On the contrary, it is far more profitable to bet on a continuation of the status-quo and trade with it - from its extreme boundary. And the current context is consolidation within an uptrend. So until the market breaks through solid technical support AND makes a lower low, we should continue to look for bargain prices at which to enter or increase our Long holdings. Right now, $140 fills that criteria.
And with that I shall leave you to ponder the tortured workings of a market technicians mind...(!)
Toodle Pip.
Rob @ BitScan
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