We are approaching a very important point in bitcoin that will determine the direction of the market for the next 6 months at least.
The upper bounds of the downward channel that has contained price action for a year is less than $30 away. In addition to that the logarithmic uptrend and downtrend lines are both around the $360 zone.
Right now there appear to be four different scenarions, one of which will play out in the coming days weeks and months
SCENARIO A
We blast through the decending channel which is just at $307 as of today. If this occured this would be very bullish in and of itself as this channel has halted the advance of any bulls for a year and could propell the price up into the 360s where there is a convergence of the logarithmic downtrend & uptrend lines. A close above the downtrend line and the price will become parabolic.
This scenario seems highly likely for a number of reasons. We had a capitulatory volume spike at $153 which got rid of all the weak hands, The recent good news concerning ETF approval in addition to a worsening economic situation in Europe. All of these situations could have a positive effect on the bitcoin price, As bitcoin becomes an attractive investment again in relation to the Euro & the Dollar. The economic situation in Europe alone resulted in a near quadrupling of the price and a new all time high between March and April 2013, so this scenario isnt at all far fetched.
SCENARIO B We touch the upper bounds of the channel and spike down just below the linear long term uptrend line before shooting back up and beginning a new rally to new highs. A move down to between 220-206 is possible. A similar move happened in October 2013 after a summer rally when the price spiked down to the linear uptrend line before beginning the rally that culminated in the November 2013 all time high.
SCENARIO C... The wildcard
We touch the upper bounds of the channel and go all the way down to the low of 153 again, forming a double bottom and moving upwards.
SCENARIO D... To the dirt!
Business as usual, We touch the upper bounds of the downward chanel, We slope down for a month (ala july-August 2014) before the resistance becomes too much to bear and we head down into the ground touching the lower bounds of the channel sub $20.
Touching the lower bounds of the channel seems extremely unlikely, short of a 51% attack, the blockchain somehow getting hacked or the some other unlikely occurence I see no way this could happen!
Ill be keeping a close eye on how price reacts to these lines in the next few days, and will be trading based on what happens at these cruial points.
Personally i think its time to pack the moon boots!