What’s up traders,
It’s Thursday. We are back again, and bitcoin has finally showed some life. After breaking that 222 level we talked about yesterday, bitcoin blasted up to the 230s on some exchanges. Lets get right into the charts.
Once 222 was cleared out bitcoin had room to run for a much deserved retracement. Price hit that 61.8% fib level that we like to look for on the money. The question still remains: can bitcoin continue higher? It definitely has room for another surge up, but seems to be slowing down lately. I’ve mentioned before that a good, healthy retracement in a trending market is that 61.8% to 78.6% level, and bitcoin has only hit the bottom end of that range. Price could retrace higher to the 79% retracement at 233 and still be bearish, but generally any retracement past 79% of the price swing may be an early sign that bulls are taking over.
Next chart looks at daily price targets moving forward:
Currently, bitcoin is sandwiched in between the two daily levels: 215 and 230 shown on the above chart. If we are bullish, we really want to see that 226 level hold as support and move above 230s. Next key resistance would come in at 240, and bitcoin would be looking strong. If price gives up that 226 level, however, we will be looking for bitcoin to test that significant 222 level. If bitcoin gives up the 222 level we could be headed back down to test the bottom of the range at 215, and ultimately move down to the 200 level.
There’s not much else going down in bitcoin land. One axiom of the markets is the concept of expansion and contraction. After a big move up (215 to 230 is about a 13% rise in price in a couple days), price will generally mellow out and contract to digest what has just happened. The idea is that in all markets there is a cycle where an expansion in the price range is followed by a contraction where ranges get smaller, which then lead to an expansion, and the process goes on to infinity.
All there is to do now is to watch these key levels. Look for early signs the may tell whether price is going to remain bullish or if the bears are back in control.
In my opinion, the 79% retracement level at 233 must hold if the bearish trend is to remain intact, but a break above 233 would signal that price is on its way to 240. On the other hand, if support at 226 breaks down, price could ultimately be reaching for 215 and 200 and possibly lower. But that is far in the future, for now, we just look at the intra day levels and take it day by day. I’ll post up another chart tommorrow and we’ll see what happened to our predefined price levels.
Good Luck, Good Trading