Originally published in the Bitcoin Bull Bear Digital Currencies and Financial Markets Report on 11/27/2013.
Short Term Outlook:
The true nature of Bitcoin’s exponential growth has been on full display over the past few weeks as global interest and media coverage increases with each passing day. The market is continuing to put in new all time highs even at the time of this report, reaching 1095 $ only a few minutes ago. As the market ripped through our target levels over the past few days, we take a look at the 180min chart shown below to gain some perspective. First, the Fibonacci extension levels off of the 453 $ low from a few weeks ago shows possible resistance at 1108 $, 1160 $, 1225 $, and 1325 $. Also, the 18/24 EMA crossover is bullish, the longer term EMA’s and 4hr Ichimoku Cloud are rising and should be supportive, and the MACD is confirming the rally. On the other hand, the RSI and 14/40 Stochastic remain in overbought territory, however as we have mentioned before this condition can last for quite some time. Given the technical picture and apparent momentum present in the market, this rally could be sustained to significantly higher levels, especially seeing as though the market has had plenty of opportunity to reverse on sharp pullbacks during the move. We are watching the levels mentioned above as well as 1200 $ and 1500 $ as potential profit taking areas. Probability XX/XX.
What’s the alternative? A breakdown below the previous major top at 900 $ would make a move down to support at 750 $ likely. Breaking this level on a confirmed move could move the market down to 687 $, or perhaps to strong support at 453$. Only a break of the 266 $ ATH would indicate a true trend reversal and much lower levels. Probability XX/XX.
BTC/USD 180min Chart from November 27, 2013:
BTC/USD 180min Chart from December 4, 2013:
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