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 - Medium/long-term: To the moon! :)
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.
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. This means we still have ~8-10 weeks of downtrend ...
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 in medium-term.
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 to low 700's.