Originally published by AxiTrader
I don't write a lot about (Bitcoin), although I do talk about it often in my daily videos. Last night's move was so significant I thought I'd write a post on it.
Feedback always welcome.
Greg
The Bitcoin bulls have been back with a vengeance lately, both in terms of their impact on price action and the chatter on the airwaves.
That makes sense because after spending a period of consolidation after it's big falls, Bitcoin has been on a solid march lately.
But after a rally that lasted the best part of three trading weeks, BTC/USD was unable to hold a break above important Fibonacci resistance overnight and has in fact printed a bearish engulfing candle for the past day's trade.
Price and volume are powerful signals when taken together.
So it's worth noting that the overnight failure - and the bearish outside day - has come with a spike in volume of CME futures which suggests that perhaps for the moment this 61.8% level for BTC/USD which comes in around $9,691 is indeed an important level traders are watching and through which price needs to push if a rally back to/above $11,000 - as many now think - is to begin.
As I often say in my daily videos - Bitcoin charts beautifully and it has again proved that point overnight.
Looking forward though here's an interesting tweet from Business Insider's Frank Chaparro on a conversation he had recently with Bitcoin uber-bull Tom Lee (HT @Sunchartist on Twitter)
That's certainly what the price action has suggested recently.
But equally, even though the recent trend is clearly up, the price action and volume suggest this Fibo level around $9.700 is equally important to a number of traders.
Looking forward a break below last night's low around $8750/70 (which is the 50% retracement level of this recent rally) would signal a deeper move is in the offing with multiple Fibo supports on differing timeframes in the $8450/8,540 region.
A break below there would suggest BTC/USD would head back toward $7,780 from whence it came.
Here's the daily chart.
Have a great day's trading.