The recent drop from $334 to $321 this weekend ended up being a sneaky bear trap. Lately, the market has been quite volatile and as mentioned in our previous technical analysis bitcoin trading has been choppy. As Monday hit, so did a few major buy orders causing the price to jump back to $335. The $336 zone is an important pivot point, it served as resistance a few times this past week accompanied by major trading volume. With positive news such as the Bitcoin symbol being added to the Unicode Standard and the acceptance of blockchain technology by banks and institutional exchanges, Bitcoin is holding strong at the current level. However, some major sell pressure is coming it’s way.
Since black friday is coming up next week, many customers will use bitcoin to buy goods and electronics. As a result, when the merchants start cashing out their bitcoins and converting to USD, sell pressure will build on major exchanges causing the price to drop. We can only speculate as to when or if the price drop will happen, but traders should be aware of the upcoming event and plan their trading strategy accordingly.
Edited chart taken from bitcoincharts.com, is licensed under a Creative Commons Attribution-ShareAlike 3.0 Unported License.
On another note, according to koinster from r/BitcoinMarkets it is currently a good time to buy, as bitcoin finally broke through the $300 resistance zone around March and July. In addition, the halving of the block reward is coming in a few months, suggesting a further increase in price.
We have been in a sideways market all year between $200-300. If we stay above $300 we have effectively moved out of that cycle and begin something new. We were on target to remain in this cycle until the sharp rise the past few weeks which indicates a breakout.
To stay level-headed, I indicated the scenario of falling back into the cycle (red line). However, I also marked the upcoming halving. I don’t see this scenario playing out. Buyers may want in before the halving with the hope of future returns. Old coins will more than likely continue to hodl, thus decreasing the supply, temporarily, while the demand accumulates. Read More
Currently the price is stable at $333 and volume has died down, it seems that the tide has receded and traders are out on the sidelines watching for the next wave. If you liked this article follow us on twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin and altcoin price analysis and the hottest cryptocurrency news.