I was very cautious on Bitcoin (BTC-eUSD) last time, there had just been a Key Reversal Down on the Daily Chart & though hopeful of higher prices I was somewhat suspicious. Then the Russian Ponzi situation in China happened and all hell broke loose on the upside. Prices only halted, exhausted, at minor highs from Sep 2014 (492.39 & 497.03). They also very crucially formed after this quick & big move higher an Indecisive Spinning Top Pattern which was the clearest signal out there that prices were not comfortable to sustain the rally and in the days following we saw a fall back below the new 50% Fib at 350.08 and below the Oct close but then halted just under 300 & started a reverse back up, though milder in nature.
At this time that I gave a TV interview and suggested that after reaching and failing at the resistance level at 350.08 that if prices stayed above the 317.92 – 314.25 area on a two consecutive close basis, we would likely move back up as we had formed a new Uptrend (currently 340.81) from Oct and using the newly formed Nov low. I reasoned that if prices were to fall then the Aug-to-date Uptrend would be tested and as this had not happened, prices ought to try back up…which is what they did. We went up and over, closing many times over 350.08. Next ahead was the band made of an earlier high at 386.81 & the 61.8% Fib of the Aug – Nov move at 385.91. This has/is being tested as nearby is also the next key level of resistance – the 50% Fib of the Nov action at 397.99. In the last few days both have been tested – we do indeed have two consecutive closes over the 385.91 – 386.81 area but only just plus the first attempt at 397.99 has led to a Bearish Doji with the possibility of lower prices next week.
However, any move lower could be seen as an attempt to try to gather fresh ammunition for another attempt higher as any two consecutive closes over a break of 397.99 would need more than what is currently available. So – overall, still looks bullish with a question mark and that question mark is due to the proximity of the 50% Fib at 397.99. Two consecutive closes over that and 422.51 beckons. Alternatively, if we head south then I would suggest it would be neutral unless we have consecutive closes underneath the combination of the 50% Fib at 350.08 and the Oct-to-date Uptrend (currently 340.81).
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