Bitcoin market update, Monday, 9/8/2014
Hope everyone had a good weekend. Bitcoin prices on the other hand have completely retraced the big green bar on the hourly from two days ago. This is bearish because market rejected 3000CNY/490USD level; market didn't even bounce that much. Now, all the people who bought btc up to 497 are all wrong.
At this juncture, we are going to retest 2900CNY/467USD. Will the second time retesting this area hold? I do not know. If recent market choppiness is any indicator, we should bounce in the short term.
Longer term charts suggests that if we do break previous low or support, 2800CNY/460USD, we will be going much lower. The move won't be choppy, it will be decisive.
Edit1: Someone asked me on reddit regarding how to determine my support/resistance: Why are you calling 460 previous low? How do you determine your resistance levels? I was thinking previous low is 442 (August 19) and resistance levels of 470 is broken recently. Thanks!
While technically it is true that the previous low is 442 on stamp.
However, the amount of time stamp traded at this level was less than 1 hour and the bar closed much higher than that. What happened is that a large market order pushed prices down dramatically with thin bid books. Is that a reliable number to trust? Some guy selling and his market order happens to end at 442, I bet if he sold another 500 at market, it would be even lower.
When I look for support/resistance, it has to be a period of time where people like you or I actually traded for a period of time. Hence the 460 level; the exact is 455. Let me know if that answered your question.