So, having paused, briefly, at the inflection point we identified yesterday, the market has powered straight up through key resistance at $960 (Gox) like a hot knife through butter. Here's how it looks on a chart:
If, this rising support holds, buyers will begin piling into the market in sufficient numbers to establish steeper trend support and before we know it the next key resistance at $1065 will be challenged.
If, on the other hand, buying evaporates here, the trend channel line will give, profit will be taken and we will equally quickly see the market retesting lower support at $960 - and if this level gives the bottom of the channel will again hove back into view.
In the meantime we have to understand that this trend is moving from its nascent - or wholesale - stage to one of increased exuberance. Momentum/emotional traders are starting to see sufficient strength to confirm their bias and take the plunge back into the market. At the same moment a portion of the smarter money, having gotten in much earlier, will be taking the other side of these later buy trades to lighten up and book profit.
While we don't yet know how this situation will evolve, we need to understand that it is happening. Long active-traders should now be tracking the market closely and at least thinking about their exit strategy. Merchants looking to liquidate in the near term need also to be clear that we are back at relatively high prices with key resistance not far to the North.
Bitcoin investors can, as ever, afford to sit back and allow themselves a cautious smile - particularly if they are regular readers of this analysis. Having weathered the impact of the Chinese Dump and followed our BUY advice at $750, they are already sitting on tidy additional profits. Happy Days...
Could we just leave you with another reminder that our blogger feed will close in days few, so if you aren't already, you need to be reading this analysis through the website; http://bitscan.com. Of course, if you are on the App - you remain good to go.
Absolutely finally - and in response to popular demand - we will, from today, be trialing LTC analysis alongside BTC, so be sure to check the title of each post before you get stuck in to the detail. On this front we would appreciate your feedback as we establish this new service. Indeed, if there is anything you don't like or understand about anything you see or read here - and cannot pick up our theme from reading previous posts - please do let us know.
That's all for now,
Rob @ BitScan