Testing resistance

Ive been keeping an eye on the price throughout the day as it creeps closer and closer to a strong line of resistance which corresponds to the top of my MtGox bear fork. The last time this battle was fought with the top trendline of my fork the price was at about 900 dollars and here we are again, except this time the price is a little below 700 dollars.

Notice I have included momentum indicator on the bottom, it appears there is a divergence in the last two lows which I have marked with blue lines. So could the bearish momentum be fading? It looks as I write that the price is making a strong effort to get through this resistance and could be succeeding.

But if we are still under the influence of the chinese bear, what is the chinese bear fork looking like?

China is still way more bearish than the west from this evidence. Its almost as if MtGox wants to breakout and go to the moon, but China wants to continue crashing lower. Could this mean a fair bit of sideways choppy action?

As many of you know by now I often like to look at the long term log view for a bigger picture so heres an all time log view, not exactly the same as the long term channel I often look at but similar.

On this evidence there could be a way to fall yet. It is this view that has made me feel the correction could go below 300 dollars if we revert to a level near that trendline, or even overshoot below it.

To be honest I am staying on the fence just now, lower lows may or may not transpire. I don know and dont have a crystal ball. Personally I am starting to wonder about accumulating a few bitcoins here and there on dips but not thinking its going to the moon, even if MtGox breaks through this resistance.

7 thoughts on “Testing resistance

    1. Yes it has, will try and post an updated chart later but problems with my internet connection over the festive period making it so its not easy. I will be interested to see if it can also break through the chinese bear fork too.

      I wonder if there will be a longer more gradual rally prior before the bear resumes with further declines but also thinking hedging by accumulating a few bitcoins at this level might be a good idea, depending on how you like to trade of course.

      1. Not sure why the rally. The trade volume looks strange too — not that high. Other than the overstock.com news there doesn’t seem to be anything else.

      2. Yes thats quite a rally! Hadnt seen the price since this morning. I guess low volume is to be expected due to holidays but as you say doesn seem to be driven by any particular reason. Maybe bulls who sold in the decline have decided price is cheap enough to buy back in?

        have been finding it very hard to do any analysis over festive period so apologies for lack of updates

  1. There is some info swirling about BTCchina and the other chinese exchange being in talk with the Chinese govt regarding regulation. From the few things I’ve read they might be trying to bend over backwards at the feet of the chinese govt and begging to be regulated at all cost so they can stay in business. Some word even of the previously frozen deposits being excepted again. I can’t comment on how reliable any of this is though.

  2. very suspicious move indeed. i’m a bit on your side by seeing this whole crash in seperated moves and by considering the chinese bear fork was not even touching its upper band and considering the fact that during the whole bearish fork china had to switch exchanges because of the BTCchina disaster (seem to be on huobi now http://www.bitcoinity.org/markets/list?currency=ALL&span=7d ) i recon that the eliot waves got delayed by the time ppl needed to move their funds. that would also explain the sideways move and weird stagnant leverage over the last days.
    i’m still mostly fiat and waiting for a buyin low. so maybe my hope that the chinese bear isnt finished yet is pure wishful thinking 🙂

  3. @afbitcoin : don’t worry, no need to update every day. Enjoy your last christmas before getting a millionnaire lol.

    @drdash, IMO, that’s not correct. To me we are out of chinese bear fork since 20013-12-25-8PM GMT. Am I wrong ?
    On daily time scale, BTCCHINA and MTGOX have a MACD crossover and momentum stands upright.
    Why this rally ? Overstock has USD1.1 billion revenue (FY 2010). So far, this is the biggest company which will accept BTC that we’ve never seen before ! Hope this is just the begining.

    Well things sound pretty good. Yesterday I bought few.

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