Well, it's been a scary start to the week, with the market topping out at the weekend and then dropping through $400 at one point during Asian trading...
Here's how it looks on a chart:
But, what does it mean moving forward?
Well, in our opinion it all hinges on what happens over the next 24 hours. If, Europe and the US continue to buy back into this dip we'll crawl back to the highs, but if we stall here the market is more likely to re-test the low of the day. So far, so obvious, right?
Okay, so let's look a little deeper. Looking back at the weekend, what we can see is a pretty ominous topping pattern on the back of another huge up-week for bitcoin. Watching, it felt like there simply weren't any buyers left at these levels, as volume and volatility ebbed away.
This has left us with a pretty meaningful wall of resistance that spans just over $150, and this could prove a tough nut to crack for the time being.
Looking in the other direction the market found support just where we would expect, around the previous highs, retested as support.
And this is why the next 24 hours is so pivotal; If we re-test those lows again those latent buy orders won't be there in the same quantity because they've already been tripped.
On the contrary, sell orders will be growing up at the highs and we haven't had a go at them yet.
When you look at it this way its difficult not to reach the conclusion that, at best, we are in for a prolonged period of consolidation. It may be that us bitcoin bulls have had our fun for the time being...
But then again, maybe its just a Monday...
Keep smiling
Rob @ BitScan
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