Bitcoin Breaks To The Downside Following Another Failure At Resistance
Despite a relatively slow market over the past few weeks due to the ‘summer doldrums,’ it now appears as though volatility is making a slow return on both the upside and the downside. With that in mind, the technicals remain key in this environment.
Last week when we returned from the Labor Day holiday in the US, the Bitcoin markets decided to take a jaunt to the upside to test what has been heavy resistance in the $630 area for over a month. Despite staying elevated for the better part of the week, this weekend brought a round of technical selling which took the price from the mid-$620′s down below $600 once again. That being said, the selloff was quickly bought up and the price recovered to the $605 area where it now sits, although we do not think it will stay stagnant here for long considering we are now in a seasonal period which favors a sustained increase in price action and volatility.
Prior to getting started on the daily chart below, however, we first want to comment on the longer term prospects for Bitcoin in order to put the shorter term analysis in context. We still think that an upside resolution out of the $450 – $700 range will materialize before the end of the year, although we cannot rule out another pullback into support prior to that move. Given that we think this remains a bullish consolidation period within a broader bull market, we would continue to be longer term buyers of the said dips, although we do expect them to be short-lived. So, with that in mind let’s move on to the daily chart for our weekly technical analysis.
This post was published at Coin Telegraph on 2016-09-12.