Short Term Update: News which moves the Market

chartBitinstant CEO Charlie Shrem has been arrested today in New York and charged with conspiring to commit money laundering. Well i think that we have just seen a strong shakeout after a bearish news for bitcoin (actually i consider it a positive news, i don’t like to see bitcoin associated to criminal like money laundering) with a sudden move down to the second deviation line of VWAP at 750 dollars.

I don’t think this news is enough to sink this market to much lower price levels, the congestion phase should continue with the short term VWAP moving average acting as resistance, now at ~$830.

I pointed out in the attached chart several occasions where BTC/USD failed to move above my reference moving average confirming the weakness of this market. The Net Volume activity was positive but turned negative after the news came out this morning.

We are in a price congestion and as long as the market stays inside my trading rage of $760-$920 the considerations i’ve made in my previous update are still valid and don’t forget that good resilience against bad news is always a positive sign.

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14 thoughts on “Short Term Update: News which moves the Market

  1. Al

    I think that caused by official comment of Bank of Russia: http://www.cbr.ru/press/PR.aspx?file=27012014_1825052.htm This forced bitstamp to stop exchange service for a while. The bank said that cryptocurrency is risky and services “will be considered as a potential involvement in the implementation of suspicious transactions in accordance with the legislation on counteraction to legalization of proceeds from crime and terrorist financing”. There are no any new laws, just an official position of central bank, but it may prevent many legal shops from processing bitcoin.
    Excuse for my english.

  2. Mike

    There is no doubt today’s drop is due to Shrem’s news. Like all such news, bitcoin has made it clear time and time again the pros are waiting on the sidelines to pick up what little the nervous nellies are selling. This is what happens on Wall Street daily – a time-tested way to redistribute the wealth. In a few days, other news items will change the price movements. As a trader in bitcoin for a few months, i never lost money buying on all these rapid drops. It’s so much predictable, I’m afraid I may be becoming a bit complacent. Shrem no doubt has certain cachet in the bitcoin community but he can easily be replaced and forgotten by others.

    1. Enky

      I’ts elliott wave analisys, i’m not a big fun of this theory and i don’t consider it a winning approach.He is looking for a drop to 500 at gox, so probably 300 at stamp considering the spread, i dont think that we are going to see 300$ at stamp soon.

  3. Adriano

    Hi Enky, I’ve been following your charts since November – thanks for all your advice. I know that you don’t analyze Mtgox and understand the reason’s why, however, I’ve noticed lately that the price gap between Mtgox and the other exchanges is increasing, do you see any issues with this? ie could this have a negative affect on Bitstamp?

    1. Enky

      I don’t see any issue, mtgox is a dead exchange and all the investors there are rebuying btcs for selling them at stamp or btce, increasing the spread further.

    1. Enky

      is not a definitive break of the price level if the price goes back immediately above it as it has done going back to 800$, it must spend more time below the support to consider it a true break of it.

      1. dude

        where’s your vwap now? if the price does not brake it then it goes with high probability at least to def -1? how about round number 800? price seem to have hard time to stay above it. it seems to have some importance as resistance/support.

  4. Andrea Chiavazza

    According to the news btcchina should be back, and bitcoinity shows there is some trades there indeed, but volumes is very low, there are only buys, no sells, and the order books looks very packed with 2 walls facing each other.
    Also tomorrow all the new rules in China should start being enforced, and we are all still waiting for the FBI to sell those coins.
    I’ve got a feeling that scary/exciting times are ahead. I think an upward breakout will be more likely though, and these pending issues are all what is keeping this market for starting another big rally.

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