Bitcoin triggered a long-term bull trend continuation signal last week as it broke out above $4,979.90 to a new record high. Since then we’ve seen short-term weakness after the digital currency hit a record high of $5,846.78 last Saturday. That price area was subsequently tested as resistance over the following four days before Bitcoin fell on Thursday. The low of the pullback so far has been $5,101.36, which put Bitcoin 12.7 percent off the high.
Given the strong long-term uptrend and the trend continuation trigger last week, a resumption of the bull trend can be anticipated following the completion of the current pullback. Nevertheless, there are several technical reasons to prepare for a deeper pullback than what’s been seen so far.
First, Bitcoin failed to break out above Saturday’s high after a four-day attempt. The failure was indicated on a drop below the five-day low of $5,380.00 on Thursday. Also, we now are starting to see the beginning of a series of lower daily highs and lower daily lows. That’s the beginning of a downtrend, although in this case the expectation is for a short-term counter-trend decline given the larger and more significant long-term bull trend. In addition, the Saturday high was right in the area of two Fibonacci measurements, marking potential resistance. One ratio was the 141.4 percent extension of the most recent 40.3 percent correction at $5,842.73, and the other the 200 percent projection of the first leg up in the current near-term uptrend at $5,815.38.
This is taken from Investopedia.com. As one who has been involved in Bitcoin for the past two years, I have to admit that am just an ordinary guy like the rest of the majority who are not into its technical aspects and could not even read some analytical article with full grasp of the matter. Now, am trying to get even to the basics so that soon am getting to be knowledgeable of this thing am getting into.
Analysis like the above can be a guide for people who are into trading and for those who are still planning to jump into the Bitcoin bandwagon. We know that the value of Bitcoin has already surged beyond what we can comfortably afford so it would be wise to be watching for occasional dips. As they are saying, buy Bitcoin at its dip because it can be cheap.
So the question is: Will Bitcoin eventually get into the $6,000 level after the hard fork in October 25?
