Bitcoin Analysis: Week of Jan 4 (The Year Ahead)

The downward trend started in 2014 continues with Bitcoin hitting a new 14-month low of US$255. The situation looks like some time down the line a full-blown Bear market would be triggered, but it all depends on the global financial landscape. The positives come from Europe with its currency meltdown and California which has acted pro-Bitcoin recently.
Last Week’s Review
Last Week we concluded with the following:
While we acknowledge the fact that Bitcoin has made it so far in the last several years that if you had bought it 2 years ago and just now decided to take a look at the price, you are extremely happy, and it’s the only reason we remain Long-Term optimistic. As for the Daily charts, everything is looking like an imminent collapse under US$300 reaching a target suggested in mid-November of US$290 (Even though this analyst took this target off the table in late November when we started closing above the 50-day SMA). The additional target as of today is in the US$270-275 range which will match the 2014 lows and the highs set during the Cyprus crisis back in April 2013.
Two scenarios in order of higher probabilities
Bearish: Even though the primary case is already pretty bearish, we have to pay attention to a complete and utter disaster at this point. The breakdown of the bullish channel that was developing for several months is calling for a lower target of US$250 and if we go into that zone, there is no support and we can see US$200 or lower in the blink of an eye as panic selling sets in.
Bullish: Not much to cling to here, but we will consider a breakout back to the US$350 area as a possibility. It will not be anything to write home about and will most likely present a selling opportunity…
The collapse in price wasn’t as imminent as last week’s analysis warned, but the results 5 days later turned out to be exactly what the technical charts predicted. The target of US$290 suggested by the Descending Triangle in November was met and within 24hrs of this, the US$270 target from the triangle in December was also surpassed. Now that we hit a new 14-month low of US$255, the question everyone will pose is, ‘are we ready to turn and hit the moon’?
As usual we will look at the weekly chart, which is the only one left where we can point to some positive signs.

This post was published at Coin Telegraph on 2015-01-05.