Today bitcoin price broke below long-term (1-day chart) horizontal support at 2300 CNY and $360 (Bitstamp). It appears that downtrend may resume, but an important barrier remains to the downside.
Time of analysis: 15h36 UTC
From the analysis pages of xbt.social, earlier today:
Prior analysis, expected price to decline to this level as an extreme low for an ongoing correction to the rally. However, the expectation was not that price break below it.
At the time of writing price has not yet declined below the much stronger support zone around the 1-day 20MA near 2250 CNY and $335 (Bitstamp). For there to be any glimmer of hope of a return to advance in the coming days, price will have to remain above this critical moving average.
The implication of a return to decline is that price is unlikely to return to the support floor in a straight line. Price action will, likely, meander around current levels (and higher) as various timeframes resolve today’s strong decline. Corrective price action is what we have been trading for most of 2015 and it is both tedious and difficult to predict.
To anticipate the market is to gamble. To be patient and react only when the market gives the signal is to speculate. – Jesse Livermore
If price can hold above the 1-day 20-period moving average, then today’s price action will have concluded a correction to the rally. We could expect buyers to return to the market and for the rally to resume. This is a more desirable outcome, but it’s starting to look like a lot of the momentum and enthusiasm of advance has dissipated. The move down seems spent for now, so let’s hold out for a reversal back up. Just maybe the big bulls haven’t all run away.
Bitfinex orderbook depth and Buy/Sell Volume:
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