If we really broke the long term downtrend yesterday (and I believe we did), we will see another rally soon. However it seems that, similarly to the situation in Oct/Nov 2013, we will retract to the medium-term uptrend line first. From there, if the line holds, it's to the moon.
So to recap:
- Short-term: Down
Since december the market was in bearish mode and we had some violent downwards movements, catalysed by some bad news from Bitcoin world. Now that the dust after Mt. Gox fiasco settles, the price is approaching the downtrend line for another time. This time it's likely that the downtrend will not hold.
The double bottom really materialized (as mentioned in my previous post, before the big move up), and now it seems we're headed up. Also, look how just after last bottom the 200 EMA crossed with 190 SMA briefly, which was a perfect buy signal - after that point the price only went up.
So, we have on daily charts:
- a clear double bottom pattern (second bottom is weaker than first one, in terms of volume and length)
- RSI downtrend that we had from mid-november last year was finally broken today
- MACD crossover and heading up
I don't know about you, but I am all long here.
Looking at the long term picture (last 2 years), you can see the following:
- every major peak was 31-34 weeks apart from another one
- after a peak, a correction took place. It was 21-26 weeks long
- after this correction, upward trend resumed for another 7-12 weeks
Right now we're 12 weeks after last major top. ...
Trendlines are proving to be very efficient in predicting Bitcoin price movements. When they are broken, often a bigger move follows. Right now, the price is (again) touching, and even below the steady uptrend line. If this continues throughout this day, one can expect some big sell offs and shifting to down trend ...
We're coming close the downtrend line again. This is a decision point. Will downward trend be resumed, or are we finally breaking to the up? Next hours will tell. There are some strong up signals (rising RSI), but bouncing off the trend line could invalidate them.
It is very possible that we will break 900 very soon. It's already 3rd time the price is in this area, and every time it retracts less than previous time. Bitcoin has a good history of these kind of movements, usually 3rd time's a charm :).
It seems that a massive $300 downmove was just yet another correction, like the one we've seen before. In percentages, it was a 30% correction. A trendline is forming, which, if not broken, could send the price again in 900's territory. If it's broken two closes well below the trendline, the price could dive down ...
Right now the price fell down, exactly as predicted before. The next bigger support is located around $350. Just above that figure should be a nice buying opportunity. Remember though: don't catch falling knives!
If it falls below $350, we could have a mid-term reversal.
We crossed the "magic" $400 figure and even after a small correction price didn't breach that level. An upwards channel was formed on H1 and the price is currently bouncing of the lower bound - a nice buying opportunity. Unless it breaches $395-400, we're short term UP. First target: $465.