BTC Update Thursday 29th August. Consolidating...
Thursday 29 August 2013
In our last update we indicated that the bitcoin market would struggle to pierce resistance at $133 at the first pass and argued that in this scenario a further retest of support was likely before sufficient new buying power would be found to drive a new leg upwards.
And this consolidation is what we are currently witnessing.
This is how it looks on a chart:
As you can see, every time the market tries to advance, sufficient sellers are found to drive it back down again. If this phenomenon continues it won't be long before those sellers take more meaningful control of prevailing market sentiment - and then we are likely to see a dip to re-test support at around $125.
Since our overall bias remains bullish, pre-placing limit buy orders in this area makes sense. The more cautious of you may decide to hold off until rising support (the diagonal green line) 'catches-up' with the market and buy into a rejection of this technical feature in confluence with the horizontal support zone we have highlighted here. Either strategy makes complete sense in the current context because in the case that we are right, we will be back into the market at a 'wholesale' price, and if we are wrong we will know it quickly and be able to govern our loss accordingly.
Of course, it is always possible that we never get this far South before sufficient buyers are found to propel the market back to the North but in this scenario it would be safer to stand aside, remembering that we have already established profitable positions at $92, $100 and $117. It is impossible to catch every move and where active trading is concerned, our first priority is to protect our capital.
Rob @ BitScan
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