Bitcoin price has recently broken down from the steepest with multiple support points. There were early warnings that a break down was likely. The Mike Hearn's article and TX backlogs caused some serious panic selling. The next up is from even a longer time frame. We briefly breached it but rallied above it so far. This line is also pretty steep so a break down wouldn't affect the longer term trend as much, but shows more short term bitcoin weakness.
The major support line is at 2340 which coincides with the previous spike high and the most recent crash. Above this support is since it is the upper end of the trading range. In terms of moving average, the 200 day and 365 day moving average is way below the bitcoin price. I use this to gauge the general longer term trend. We are a bit extended at these prices since the moving average is so far away from the price, but price can remain at these levels for an extended period of time.
The last and most important thing I want to talk about is Dow Theory. If you are not familiar, I hope you can read up on it in one of my previous Dow Theory articles. In summary, Dow Theory suggests that a trend going up needs to form a higher high and a higher low and vice versa. Look at the red arrows on the chart; we have formed lower highs on multiple occasions on the . While it is not immediately , it does show buying weakness. On the other hand, the market is also forming higher lows which confirm that we are in an uptrend. We have two conflicting signals, which bring me to my next point.
In the short to intermediate term, I expect further market weakness in the short and intermediate term. We have conflicting signals in the Dow Theory which suggests bitcoin price might be in a choppy market. Since price is at the upper range of the trading range. I expect it to pullback further. I am still long term since we are trending up. So unless and supports start to breakdown in addition to a lower high and a lower low, I would not change my long term price projection
I’ve covered a lot of TA stuff here, let me know what you think or have any questions
My BTC trade performance with time stamp: http://www.ibankbitcoins.com/bitcoin-trade-performance
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