The trading range Bitcoin found itself mired in for the last few days has finally broken to the upside.
After the fall from $1000 (Bitstamp rate), the Bitcoin price found strong support and bottomed around $800, as suggested in my last trading update.
Bitcoin price then struggled to rise above the 38.2% Fib or $850 level. Now broken to the upside, this level will likely act as support as Bitcoin price currently falls to retest the breakout.
The next immediate challenge is the 50% Fib, which very nearly coincides with the last fractal high at $878. At the moment, price seems to be consolidating between these two levels.
For those of you following my trading, I’m still long. Holding through that trading range was no kind of fun but it paid off. With any luck, Bitcoin price will soon embark on another trip to $1000.
A lot of people have been wondering lately: why price didn’t crash on the GHash worries or jump on the Overstock excitement? Ultimately, it isn’t news which moves the market; it’s people buying or selling which moves the market. Although news has been mostly positive lately (I interpret the community’s effective response to the GHash story as a sign of health), there simply remained a lot of sellers to satisfy before we could move higher.
Check this out:
This chart is copied from Hypron’s original work on TradingView.
Hypron also made this useful site which lets you monitor the Bitcoin price across (by default) Gox, BTC-e, Huobi and Bitstamp – all on one screen.
By connecting the low points in October of 2011 and 2013, then angling the channel between the 1st recorded low and high, a very interesting channel is formed. A lot of major turning points coincide with the levels formed.
I regularly use Fibonacci levels in my trading and this new Fib channel tool also seems really useful.
If nothing else, this channel shows Bitcoin price remains in a steady uptrend over the long-term. For this reason, I favour long over short trades and this reasoning is more valid the longer the timeframe. A long from a good support held over time is definitely the least risky path to profit in this market.
I published this chart about a potential bull flag forming. Currently the topside is being tested. If price decisively breaches the flag, I’d consider that strongly bullish.
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