Bitcoin Analysis: Week of Nov 2 (Intro to Stochastics)

Note From the Author: Please follow me on Twitter (@Tone_LLT) for additional updates to the state of Bitcoin’s price volatility
Last Week’s Review In last week’s post we concluded with the following statement:
We are as neutral across the board as can be, with the Long-term chart looking borderline Bearish once again. What looked like a great buying opportunity and continuation of momentum from early October has fizzled away. There are definitely positives to point to in that the demand in early October was something we have not seen in 6 months and if we turn right here at these US$330-340 support levels we should have established that textbook higher low that we were hopping for prior to the move up to US$420. The ideal course of action right now might be to just wait and see if this week’s lows are here to stay.
Since we are calling the current conditions 50/50, here is what to watch for in no particular order:
Bearish: A fall bellow the US$340 will likely bring about lower prices. Support levels under that are $330, $300 and the US$265-275 zone… don’t even want to think about what happens below that.
Bullish: The first small hurdle is the US$363-$365 area that has been touched on two small rebounds this past week. Once that is broken to the upside some momentum should set in and the next level of resistance is the US$385-400 zone where we got stuck for almost an entire week. Breaking that takes us to new highs at the US$440-450 resistance zone
Last Sunday we were completely 50/50 as to which direction the price would go. We identified a range between US$340 and US$363 and concluded that if one of these lines ware to be crossed, there would be a continuation of the move. On October 29, we fell bellow US$340 and even though there was a small rebound the next day from US$330 to US$350, it was too little too late and the prices proceeded to fall all the way to about US$315 soon after. This move has left Bitcoin’s price in a very vulnerable position as some are now beginning to lose confidence as to whether this technological experiment going into it’s 6 year would be the revolution early adopters expected.
Let’s take a look at the long-term chart, which after a very promising 2 weeks with buying volume not seen since the 2013 days, has once again resumed its Bearish trend.

Last week we reserved one additional week to allow some hope for the price to appreciate a bit, but once US$340 support was lost, the Long-Term view was once again considered Bearish. At this point there is not much technical support left that is going to keep it from crossing under US$300. The only positive still left to consider is that a lot of big players got in when the price dipped about a month ago and if some of them sold a bit for profit they might buy big again just above US$300 in order to keep their earlier position in the money.
On the flip side however, some of those big players might consider taking whatever profit they can get right here just above US$300 so that all that effort spent tacking down the BearWhale does not come at a loss. If that turns out to be the case, Bitcoin can drop under US$300 quickly and then accelerate the fall into the mid US$200 US$340 support was lost, the Long-Term view was once again considered Bearish. At this point there is not much technical support left that is going to keep it from crossing under US$300. The only positive still left to consider is that a lot of big players got in when the price dipped about a month ago and if some of them sold a bit for profit they might buy big again just above US$300 in order to keep their earlier position in the money.

This post was published at Coin Telegraph on 2014-11-03.