Bitcoin Analysis: Week of Nov 23 (Concept Review)

Note from the Author: Next week’s analysis might have less detail or be a little late as I will be speaking at Bitcoin South conference in New Zealand.
Last Week’s Review As usual we start with an overview of what last week’s conclusion stated:
‘Now that prices have stabilized a bit, it looks like a decent place to test the waters for a Bull entry. This run up that took place has turned all of our charts Bullish, but it also did that in the middle of October right before the picture deteriorated. You do have a clear low at around US$375 so any entries to buy here have a very clear indication of when you can admit you have made a mistake. Another way to play this is to consider US$375-400 a neutral zone. Anything over $400 is an indication of higher prices and anything under $375 means the pullback probably has some more legs.
Two scenarios in order of higher probabilities
Bullish: the pullback low is most likely in at US$370-375, so we should be seeing more buyers coming in. look for the same resistance points to be broken as were mentioned the last few weeks. US$400, US$440-450 zone, then US$500. US$420 is no longer important since it was the previous high and has been cleared.
Bearish: In case there is more pain in store on this pull back, look for $340-350 as the next support if we close under the 50-day SMA currently at US$375. Under that there are plenty of support points at US$330 and US$315, but if that last one goes, look out bellow because it will get real ugly in a hurry.’
Once again Bitcoin price movements are proving to be extremely more difficult to forecast from both a technical and fundamental perspective. It should now be a fact that the great rally in early November was nothing more than traders moving the market. The evidence for that is now that things have settled the price is lower than it was prior to the start of the rally. This is not the type of pricing action that takes place during any kind of fundamental improvements. However, there is nothing wrong with traders controlling the price, it happens all the time in the stock market with companies way more liquid than Bitcoin is today.
As for last week’s action, our primary case that prices should remain elevated was not meant to be and once again we are forced to have the less likely scenarios play out in the price action. Yes, this can be very discouraging but that’s why it’s only recommended to trade with 10-20% of your Bitcoin wealth and leave this career to those who can actually watch it continuously or those with enough coins to move the market. Once the price action was not able to hold the level of the breakout at the 50-day SMA at US$375, it was over and the market fell an additional US$25 .
The long term chart is hanging on to its Bullish view by a thread and will stay that way as long as we remain above the broken descending trend line.

This post was published at Coin Telegraph on 2014-11-24.