The bitcoin market is currently facing a number of technical headwinds, including a likely retest of a critical support level and a cross below a key long term moving average.
Key Support Test
The low 90s have proven to be strong support for downward pressure over the past three months. That level first served as the inflection point for the final run-up before bitcoin peaked at $266/BTC. Since then, the low 90s has served as support for downward price action, accompanied by outsized volume, indicating a key technical level. Downward pressure towards that level has been increasing since it was first tested in early May, signaled by decreasing highs after every retest. Currently at $95, it is again about to teset this important region.
source: markets.thegenesisblock.com
Old Support Becomes Resistance
Also indicating a shift towards negative investor sentiment is the downward break of the 100-day moving average. Previously serving as support during major negative movements, the 100-day MA was broken on June 9 for the first time since October 2012. It was subsequently retested upwards, proving to now be a resistance and further strengthening the signal of negative sentiment.
source: markets.thegenesisblock.com
Positive Trend in Jeopardy
Looking forward, we expect to see increased volume again if the low 90s are retested. One more indicator is also on the horizon: bitcoin has traded to a higher monthly low for the past 16 months. The June low was at $88/BTC, breaking that would signal a significant trend reversal.
This is further compounded by a lack of expected market reaction to positive fundaments over the last few weeks. Mt. Gox indicated progress towards regulatory compliance by filing for status as an MSB. Germany clarified that bitcoin is included in existing regulation that there are no taxes on investments held over a year. Regardless of these developments, the market has continued the downward triangle pattern described above. Breaking through the low 90s would signal an increased probability of significant negative price action.
I’ve been saying this for weeks. The signals of a pending sell off are only getting stronger
Sorry, but most of your TA is baseless. Your indicators lack theoretical backing and how in thev world do you want to infer “investor sentiment” from braking of some arbitrary EMA? Do you mean “investor” as in VC-investor? Please!
Both previous comments are pretty much in balance as irrationally bearish and bullish respectively. Realistically, who expected the price action of BTC at the start of this year?
Long-term I remain bullish, mid-term bearish and short-term: who knows? No-one does for sure.
One thing that is evident is that long-term large-holders are yet to run away from the market. If the price falls again to $50 I personally will see this as a tremendous buying opportunity. Anything below that as a sign to get out and stay out for a few months.
You have to bear in mind that there are a lot of early adopters still with large stakes in Bitcoin who have taken profits but still left healthy chunks in storage ready for the next spike which will be built upon real-world applications, a now very alert media and opportunities such as the Winklevoss’ EFT, a way for ‘real’ investors to tap into cryptocurrency growth without getting their hands dirty on MtGox or *shudder* BTC-e.
Run when the price falls but don’t go too far, you may just regret it!
After two days at almost exactly 90 and a 20% drop to the low 70s I’d say you just about nailed this. Nicely done.
Now what thought? Is the 90 support gone? What’s next?
I’m also very curious about what’s coming up now… some speculations?
The ma100 daily is not important. Usual level to watch are sma20,50,200. The most important one is 200 and we hadn’t touched it in a year before yesterday. That’s the only thing there is to look at now.
The main bearish sign was the breakout of a 4 months trendline on june 28th. Support at the ma200 could mean restesting of the trendline as a resistance. Otherwise we might be headed to 50.
Would you guys consider changing the chart’s Time Period to use the time range of the overall chart please (like Bitcoinity’s)? 10m | 1h | 3h | 12h | 24h | 3d | 7d | 30d | 6m | 1y | custom. It’d be much more intuitive.