Not much happened since my last update ten days ago, the market volatility dropped a bit and XBT/USD is struggling to stay above 600 dollars. It is a characteristic of this market because it is composed by amateur investors they don’t have the patience to hold and after a while if nothing happens they start to sell for eventually rebuying later. Aniway I summarize the situation as follows:
- Price above long term VWAP (now at $440)
- Slope of ALMA moving average slightly positive
- Weak buying volume activity
- Ratio between buyers and sellers is negative, and it has been so since December $1200 top
- Market reactions to good news has been sluggish since january $1000 top on zynga and facebook news, this is not bullish, investors are reluctant to buy on good news.
I think that this market will need time to absorb the “huge confidence hit” because of MtGox fiasco but as long as it stays above the one year VWAP ($440) i’m not worried for a possible bear market coming. For who has been ruined by MtGox and its phenomenal CEO and wants to enter again in this market there are two possible strategies:
- buy now 100% of your position
- buy now 50% and the remaining 50% if bitcoin retest again my long term vwap around $450
Stoploss for both strategies could be a weak market going under $350-$400 for a prolonged period of time and a dropping network difficulty (currently on a strong rise).