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Sure, we could go below $100 as the long term support is much lower than the current price. My original analysis was that the price would decline to meet the long term support at $40-50 six months after the April 10 peak.
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57 days after the April 10 peak Nearly two months after the peak at $266, it is increasingly evident that this bubble may have completed its collapse. Price action for May was bullish/neutral - not bearish - even in the face of bad news events. The May low of $80 has not been surpassed on the downside, and the early May high at $125 was surpassed later in the month. The post-peak highs of $166 on April 23 and $149 on April 28 still stand. The bubble collapse pattern now looks less like the June 2011 collapse and more like a damped oscillation consolidation centering on $120. In the illustrated chart, I circled the mild August 2012 bubble-correction. Note that prices did not crash back to levels of June-July, but rather proceeded sideways and upwards. I now believe that bitcoin prices could progress sideways for much of the rest of the year until the long term support line approaches. Observe that the long term trendline I drew suggests that bitcoin prices are generally increasing 10x every 14 months. Accordingly, I expect sharp pullbacks towards the support and slower recoveries upwards as is typical of a long term rally.
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Supposing that the big sale was a shock and not a trend reversal, I expect that a triangle consolidation pattern will unfold on the 15-minute chart, perhaps with the apex at $125.
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A May support trendline has been tested and held.  |
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This triangle I think illustrates the market's digestion of the money laundering news. As the May trend has been upwards, I suggest that this triangle will more likely be broken out to the upside, e.g. the support trend line will prove stronger.  |
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The rally broke through resistance at $123 and has paused near $127. Volume continues to be modest.  |
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Support bid wall at $120 has been removed in the face of this possible trend reversal.
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Bid wall at $122 is being consumed. Volume modest.
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If the low weekend volume that we have come to expect is not affected by the bitcoin conference, then the support wall at $122 and the resistance at $125 may hold until volume picks up late Sunday.  |
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If it were not for the bitcoin conference this weekend, I would expect some sort of consolidation after the breakouts at $116 and the big one at $120.
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Still hedging ... With respect to Bitcoin as a technology, there is clearly a lot more to be said. Currently it seems that Bitcoin, while innovative, has a number of limitations and weaknesses in its design, and might yet turn out to be just the first draft for future crypto-currencies. However, as an organization that supports cryptographic experimentation, we believe the best answer to Bitcoin's potential shortcomings is for others to come along and offer superior alternatives. |
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Can't wait until i get my sub $90 coins back. Should be soon!
Even if there is a trend reversal, the last drop to $80 took several days. |
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The rally is now spiking upwards, and pausing at $125. The rally is about to make a new high for May after the low of $80.  |
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After the wall at $120 was consumed, the rally has paused at $122.  |
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Interesting how big bids quickly follow the rallying price point - thus preventing a large spread.
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Note the steep bid and ask walls near the trading point. I wonder if volume will drop off this afternoon as we approach the weekend?  |
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The sustained rally, having broken through the resistance at $116, is now facing resistance at $120 and beyond that $125.  I've said it in another thread, I'll say it again: I really appreciate your posts. Initially I suspected you're posting with a bit of a bearish agenda, but I was wrong: you let evidence guide your analysis, not wishful thinking. btw, I'm not saying you're not bearish anymore, I suspect you still are, mid-term at least, but I respect your opinion a whole lot more than that of others because you genuinely seem to be interested in predicting shit, not in publishing post-hoc reasons for your trading decisions like most of us shlubs are  Thanks so much. My posts on this thread are mostly observations of current trends, highlighting the drama between support and resistance. |
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I'm a little confused by the above chart. I can clearly see sell orders for 3377 BTC between $118.00 and $118.99999 on Clark Moody but nothing shows up on your chart in that area.
What does it represent ?
Its a depth chart. Its the same data that clarkmoody would show if clarkmoody would work correctly. I would not rely on clarkmoody at all for trading, it is extremely buggy and shows orders where there are no orders anymore, sometimes you even see asks lower than the highest bid and bids higher than the lowest ask. Clark Moody does a great job, however the Mt.Gox data feed has numerous problems that you describe. Chiefly the Mt.Gox data feed is not always consistent with regard to depth and trades. |
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The sustained rally, having broken through the resistance at $116, is now facing resistance at $120 and beyond that $125. |
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The sideways trend of the past two days has been steadily resisted at $116, while the trading range has narrowed.  |
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