Good morning, after more then one day i finally managed to download updated data about mtgoxUSD from bitcoinchart , i’ve now a better picture of what is going on. I think that the correction ended in a severe selling climax bar that normally occurs at market bottom with a total volume of 475k btcs that changed hands, remarkably. The bottom occured just below the minus two standard deviation line of the VWAP (volume weighted average price) the excess below it it’s what i call “last motion”; support is now at 68$, vwap is at 130$ and it’s providing some sort of resistance, upper deviation line is at 190$ where probably this reaction will meet strong resistance. It is very important in the next week to move above the vwap over 130$, otherwise i’ve to conclude that the market temporary reversed to the bearish side as long as it stays under the reference average.
I conclude this update spending two words on net volume, that i repeat it’s the difference from volume made on an uptick minus volume made on a downtick, i use it to judge the momentum or trend in order to make assumptions about its future price movements. Well, i report a net volume of minus 70k btc on the day low, i’ve seen worse days in the last 2 years, for example last August 2012 during the infamous “pirate40” sell off i remember a net volume of more then -110k bitcoins, another selling climax bar that marked a strong bottom, 7.5$ at that time.
It has been a severe drop from 266$ down to 54$ but i remain confident that the recent bottom will hold. If i’m wrong and the market will persist with its short term bearish behaviour and it will go under 50$ i’ll probably have to close my long term trade from 13$.