So, the time being, bitcoin's pull-back was arrested at the first of the the rallying points we highlighted in our last post.
Here's how it looks on a chart:
To re-cap, having broken through resistance at point One, the market failed to follow-through and this provoked the break back through old resistance as support at point 2. The market has subsequently rallied from point 3, which was the nearest support level of the 3 potential scenarios we highlighted in our last update.
The big question from here is what happens if and when the market gets to point 4. We need to be clear that it's going to face still resistance at $960 (Gox) and North from those intent on loading up on their shorts, fearful bulls who don't want to push their luck and anyone else who needs to liquidate back to fiat and has identified this price point as the best the market is likely to offer them in the short term. If you fall into this latter group you should take heed and make your plans.
Having said this, should the market manage to shirk off this wave of selling and power straight back into its former trend channel, it will represent a hugely bullish indicator of market strength in the short term. Seeing this a good few bears will, once again, lose their confidence and close their positions, which will in-turn feed the positive order flow.
Finally, it needs saying that if the market reverses before we even reach $960 resistance, it is unlikely that the shallow rising support line (against which point 3 was indicated) will hold at the next test and in this scenario $835 is a racing certainty.
And that's all there is to say for the time being. Except to add that if any of you are interested in actively trading bitcoin, with bitcoin, you could do far worse than check out btc.sx. Its an excellent platform, you can create an account in seconds and the CEO is renowned for his absolute integrity.
And with that thought we shall leave you, but do keep an eye on things as we are yet to reach the conclusion of this latest latest act in the play that is bitcoin.
Rob @ BitScan