Yesterday we wrote that any drop to $139-140 would, in our view, represent a sound 'wholesale' buying opportunity.
Overnight the market fell and rebounded from $138.
So we were one dollar out. Grrrrr...
Anyway, this is how it looked on a chart:
As you can see, the buyers were lying in wait right where we reckoned they might be. The result so far has been a $5 bounce.
Does this mean that $150 (and above) is on? Maybe, but at this stage it's impossible to be sure. All we can say for now is that when the market retested old resistance as support, it was rejected. What us bulls will want to see now is follow-through, because if we fall back to retest support again within the next 24 hours, particularly if we have failed to even reach for the tops, then there will be far fewer buy orders to trigger a similar rejection at the second time of asking.
And this is the trading game. We never know. All we can do is try to understand how mass psychology is most likely to evolve, identify our levels and play the probabilities.
One reader commented yesterday that it all seemed like 'pseudo scientific naval gazing' and in one sense he was spot on. Technical analysis is, while rooted in psychology, more art than science. But having said this, the last 24 hours hopefully goes to show that it does have merit :-).
Anyway, I hope that many of you managed to pick up some bitcoin at the wholesale price we identified and that new buyers keep jumping aboard.
Rob @ Bitscan