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BTC Technicals: January 12th, 2014

January 12, 2014 at 19:10 by Akshay Datar

Volume has returned to the Bitcoin markets in the past week, following the end of the holidays. This has also brought back the volatility that is so typical to the Bitcoin market.

On Monday, Bitcoin rallied to a high of $995 on Bitstamp. It hit strong resistance in the $990 — $1000 range, and without strong buy support, almost immediately fell back to the $930 range.  This is where the last broken trendline turned into support — the price bounced on it a couple of times before breaking this support and falling to $780. A rectangle formed, holding the price between $780 and $850 for the rest of the week.

As rectangles are generally continuation patterns, a downward breakout was expected. But instead, the rectangle broke upwards on Friday evening. A small retracement followed, which confirmed the new support at the $850 level, and the price rallied from there to a peak of about $910. Again, finding little support for another rally, the price eventually dropped to the current level of $850. It is speculated that the unexpected news of Overstock accepting payments in Bitcoin triggered this breakout.

The past week’s price movements has reversed the upwards trend we had since mid-December and has seemingly started a short term bearish trend. This is also confirmed by the MACD indicator. The $910 peak reached on Saturday the 11th of January was a lower high than the previous one ($995). In the coming week, then, a decline in the price is expected. Supports are at $800 and $780. The old support at $820 seems to have disappeared. Since the rectangle formation broke out upwards, it unfortunately cannot be used to gauge the limit of this current downtrend.

In case of an unlikely upward movement, resistance levels are at $910, $945 and $995.

2 Responses to “BTC Technicals: January 12th, 2014”

  1. Robbie

    Very good analysis and you were right it seems. Keep it up!

    [Reply]

    Akshay Datar Reply:

    Thank you, I’m happy I helped you.

    [Reply]

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