BTC Update Tuesday 5th February
Wednesday 05 February 2014
Regular followers of BitScan's market analysis will have noted that we haven't posted for over a week.
There are two reasons for this. The first is that since the market hasn't moved, there really hasn't been an awful lot to say. The second is that we have been reconsidering the best prism through which to view the market. The conclusion we have come to is that with daily volume at BitStamp closing in to meet that of MtGox, coupled with the mounting uncertainty swirling around the viability of MtGox moving forward, convince us that now is the right moment to shift our commentary from one to the other.
So, until further notice all our analysis will focus on the BitStamp market. We appreciate that some of you have been asking for this for some time. Hopefully this will serve as proof that we do listen to our clients.
With that said, lets get to work and look at a chart:
What we can clearly see here is that the market continues to consolidate within the boundaries of a gently downward sloping - and well defined - channel.
As we drift sideways in the vicinity up the upper boundary of this channel, there really isn't a lot for any of us to do. This wouldn't be a good place for active traders to BUY, as downward sloping resistance is close-to and risk of a downside surge against it remain significant.
Active traders could, of course, consider selling here but before doing so, they should bear in mind that the overall context remains UP.
So, what can we say? Well, on the one hand, should the market surge North to beyond the upper resistance boundary, a momentum move to $845 is highly probable. Should this occur it may well set up a sound BUY opportunity on a rejection of $845 as support. We'll certainly be watching for that.
On the other hand, should the market fail to breach channel resistance soon, $765 will once again hove into view and if this gets pierced on building momentum, $710 is likely to get tested as support.
And that's about it for the moment. Except to say that from an investment perspective, consolidation at or near the highs of the most recent Up leg is a strong indicator of continuation - and that's good news for all of us - right?!
Cheerio for now,
Rob @ BitScan
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