Short Term Quick Update: H8 chart

UploadImageThis is a view of this month and it is visible that BTC/USD failed to go above the short term VWAP level at 112$ (now 111$); i’m worried of the recent weak behaviour and i’m starting to have concerns about the health of the long term uptrend but as i stated in one of my previous long term update i still think it’ll not go under 50$ this summer.

Again, in case of strength above the vwap level at 111$ i will change the short term outlook from bearish to bullish.  For now, i see the possibility to reach the 90$ support so to attract buyers and let BTC/USD rebound few $$.


Short Term Update

UploadImageThis is a  view of last 30 days and not much happened in the last ten days since my last update.

BTC/USD is still fighting to go above the short term VWAP level at 112$ but at least we have had an higher low around last 14-17 June.

My view isn’t changed from the previous update, any strength above the vwap level at 112$ will change the short term outlook from bearish to bullish. Traders who want to anticipate the market for a quick profit would be wise to place the stoploss under 90$ and a possible take profit maybe at 122$ but it remains risky to buy with bitcoin still having difficulties to pass 112$.

Short Term Update: MtGox H4 chart

UploadImageThis is a view of last 8 days, each bar represents 4 hours. VWAP levels and deviation lines are computed using last 40 days. I’ve closed my short term trade when BTC/USD dropped below my support level at 114$, after a strong sell-off the market found support at the second deviation line of the VWAP around 90$, the subsequent rebound should stop at the VWAP confirming the weakness of the BTC/USD pair. Any strength above the vwap level at 112$ could mean that the short term trend has reversed again, to the upside this time.

Long Term Update: MtGox monthly chart

Monthly ChartFor the first time i show here a monthly chart, now that we have enough data since July 2010 when MtGox opened its “doors”. After a 9 months strong advance from 0.06$ to 31.91$ BTC/USD entered in a bear market that lasted 6 months down to 1.99$ in November 2011, since then we have seen a very strong rally and two accumulation phases spent at 5$ and 10-13$ up to January 2013. This year behaviour has been extraordinary with prices advancing from 13$ all the way up to 266$ that i consider it an  important top like the one seen in 2011. I don’t think that this year BTC/USD will go above 266$ again, what i expect now it is a mild correction.
Keep in mind that despite the massive negative money flow seen during the drop and record volume bitcoin is still well above 100$,because of this interesting divergence i don’t expect the same extreme correction happened in 2011; i’m more for a slow retracement with a final bottom above the 32$ 2011 top, and even above the recent 50$ double bottom.

Apart any considerations about volume activity there is also the fact that until mining power or network speed will not give signs of slowing down the price will not come down easily. In 2011 only in august the network speed started to fall and bitcoin crashed from 14$ to 2$ and even if now the network speed might slowdown and retrace a bit it is not excluded a flat phase of this market instead of a steep fall. It is interesting also that there are too many players out there waiting for a big drop to 30$ but the market isn’t here to satisfy all their desires and most of the time it follows its path and not what the masses expect.

Unlikely that there will be a repetition of 2011 “pump and dump” pattern but, just for your curiosity, it is easy to forecast the bottom, using a logarithmic scale and projecting the same extreme drop from this year top at 266$ the bottom should be around 18$.

Short Term Update

There is not much to say, as i said many times it’s hard to forecast the behaviour of few large bitcoin investors, when they decide to sell there is not much support in this tiny market, given the low liquidity (yes,despite mtgox is the biggest exchange i consider it a small market without much liquidity). So far the market is holding above the short term VWAP after a sell off of roughly 35k bitcoins; i think i’m going to close at loss this trade if i see a decisive break of that level (114$).