Bitcoin Price Fall to $350?http://www.marketoracle.co.uk/Article47793.html
Yesterday, we wrote:
The volume is still relatively significant and today's close might turn out to be even more important than yesterday's. If Bitcoin stays below $400 or depreciates further, we might be in for a move down.
In our opinion, Bitcoin still might have room for appreciation but the developments of the last two days have made the outlook more bearish
Bitcoin stayed below $400 yesterday and, in fact, today we've seen a move down (this is written before 10:00 a.m. ET). There has been an important change compared with the previous couple of days, though. Namely, the volume is visibly lower. At the moment of writing, not even 25% of yesterday's volume has been reached. Based on that alone, today's move doesn't have very important bearish implications.
It has been a rather weak move down on relatively low volume which doesn't add a significant bearish tinge to the market conditions. But does this development have any other possible outcomes?
It is possible that today, with not much bitcoins traded, marks the end of the pause in a more significant rebound - the one that started in the first week of October. But this is not what we're betting on just now. If Bitcoin stays below $400, even without a significant move down, we might still see more depreciation. A move to $350 or slightly lower is a possibility but not one which would make us suggest shorts at this time.
On the long-term BTC-e chart, we see a possible beginning of a move lower, which could end around $350. Yesterday, we expressed the following views:
There's been a moderate reversal and the volume is similar to what we saw yesterday. Overall, today doesn't look too inspiring as far as long positions are concerned.
If we see more action below $400, even not necessarily a strong move down, just stagnation below this level, Bitcoin might be opened up for a more significant slide. If this is not the case, we will stick with the appreciation scenario since the currency might still recover some ground following the last two plunges (think Sept.-Oct.), possibly to $500.
If there's a strong move above $400, we might reenter longs. At present, a buy limit order looks like the best way to go with an entry price at $427, a stop-loss at $357 and an initial target at $500.
This is still up to date and today very much looks like a possible first day of stagnation. It's too early to assess whether this is really the case but it seems to us that we might see more weakness in the days to come, perhaps preceded by not much action.
If Bitcoin comes back and goes above $400 the situation will be decidedly bullish and it might even start a sizeable rally. A move below $350, however, could be an indication of more pain to come.
At this time it seems best to stay out and see if the currency rebounds off $350. We still favor an appreciation scenario with Bitcoin coming back with a vengeance but the situation is not favorable for long positions just now.Summing up
, we don't support any speculative positions in the market.Trading position (short-term, our opinion):
no current positions; a buy limit order, entry at $427, stop-loss at $357, initial target at $500.