A new emerging commodity / currency : Bitcoins (BTC)

I reviewed the longterm charts and thought I should share this with you immediately.

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As mentioned in Friday's update, Bitcoin/USD have started a correction after breaking below the decisive 1$ mark as highlighted previously. The key question is how far could this correction go?

To get a better picture, I reviewed the longterm chart, using logarithmic scale which is most appropriate for this strongly rising market.
Key indicators continue to be strongly bearish: The MACD crossed downwards strongly for the first time in record, and Exponential Moving Average 13 has turned down.

When drawing the already often shown and proven longterm trendline through the last significant lows, it is clear that there is potential downside towards 0.5 $.

As long as prices do not break above the downsloping EMA 13 (at 0.89 $), the downtrend is intact.
A break above 1.0 $ enables a further rally to 1.1$ (all time high, and then higher towards 1.5$, 2$, etc.)

http://mtgox.com/blog/wp-content/upl...0220daily1.bmp

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As promised, here is tonight's Technical BTC Update.

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BTC/USD are in a correction phase. Bullish sentiment is still 62.2% as measured in my poll since Feb 19 which is still typically to high for the start of a sustained rally. It seems that too many people are invested and not so many can buy and carry a strong rally above resistance levels. This does not mean a rally cannot start from here, but sentiment does not support it.
Key indicators continue to be strongly bearish: The MACD crossed downwards strongly for the first time in record, and Exponential Moving Average 13 has a downward slope.


Analysis
1. Longterm outlook:
Prices are trapped between the previous all time high of 0.5 $ and the latest high at 1.1 $. As long as the 0.5 $ level is not broken, we continue to be in a rally. But as long as the 1.1 $ - 1.0 $ area is not broken to the upside, we remain in a correction.

The 0.4-0.5 $ is strong longterm resistance: It is strong because of two reasons: It is horizontal support and logarithmic trendline resistance.

http://mtgox.com/blog/wp-content/upl...10223daily.bmp

2. Short term update
Short term, we see the following key levels:

a) Resistance:
* 0.95 $: Right shoulder of a head and shoulders pattern (bearish). A break down below 0.8 $ may spark strong selling. The target for that is the same distance from the 1.1 $ high versus 0.8 $ = 0.3 $ downside potential, leading to the 0.5 $ target. This may then be associated with strong and high volume selling.
http://mtgox.com/blog/wp-content/upl...0223hourly.bmp

b) Support
*0.8 $: This level needs to hold to invalidate the head and shoulder bearish pattern.

Next update: Friday, 25th.
Your S3052

Here a very brief Technical BTC Update.

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BTC/USD remain in a correction phase.

While the short term head and shoulders bearish pattern has been invalidated with the break above 0.95 $, the intermediate correction is probably not over.
There is a strong likelyhood that we see another leg down toward 0.8 , or even 0.5 eventually.

Only a strong rise above the 1.0 - 1.1 $ area brings the bull back into the lead.

http://bitcoincharts.com/charts/char...&1298750802834

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As promised, here is tonight's Technical BTC Update.

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Overall, BTC/USD are in an initial uptrend after the correction phase, with potential to regain RALLY momentum.


Analysis

1. Longterm outlook:

BTC/USD continues to be BULLISH longterm, as long as the 0.4-0.5 $ area holds (strong longterm horizontal and trendline resistance).

http://mtgox.com/blog/wp-content/upl...ly-300x204.png




2. Short term update

The most probable scenario is a break above 0.95 $ as the kick off to a further BTC/USD rally.

Short term, we see the following key levels:

a) Resistance:

* 0.95 $: Downsloping trendline from the 1.1 $ all-time-high.

* 1.0 $: Round number resistance

* 1.1 $: All time high

b) Support

*0.8 $: Strong support: 1) lower Bollinger band, 2) horizontal support.

Next update: Friday, 4th.

Your S3052





Disclaimer: Please always do your own due diligence, and consult your financial advisor. Never invest unless you can afford to lose your entire investment.

http://bitcoincharts.com/charts/mtgo...MACDzi3gSStoch
http://bitcoincharts.com/charts/mtgo...MACDzi3gSStoch

As promised here is tonight's bitcoin technical update.

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Overall, the longtern forecast is fully on track. Bitcoins are in a clear rally mode. Short-term, prices meandered between 1$ and 0.8$ and sometimes it is best to step back and let the pattern form more clearly, instead if trying to anticipate the smallest movements.
The situation is now clearer from a technical perspective with 2 major options (see below)

Bitcoin sentiment is still 41.7% bullish and only 29.2% bearish which may hinder a fast breakout above major resistance between 0.95 $ - 1.10 $. For perspective, if bullish sentiment is much higher than bearish sentiment it means that most people are already invested and likely have used up their buying power, and upside is limited (obviously this can be overcome with new fund inflows).



Analysis

1. Longterm outlook:

From an Elliott wave pattern standpoint, the corrent correction from the 1.1 $ high does not look impulsive which may indicate that we see a continuation of the longterm uptrend. However, the consolidation / correction that strated at 1.1 $ may take different forms which means that we can see lower prices before the correction is over.

The longterm price rally is still on track as long as the 0.5 $ - 0.4 $ area is intact (see also the lower chart trendline below).
A decisive break of 1.0 $ and better 1.1 $ (previous all-time-high) is needed to bring the bulls fully back into the lead.


2. Short term update

Prices moved sideways over the past days/weeks and are now becoming trapped in a contracting triangle. BTC/USD will break out of this triangle anytime.

1) A break above the downsloping trendline (currently at around 0.925 $) will likely lead to upside towards 0.95 $. The order book is full with big selling volume at this level (at least in bitcoin-relative terms). Only if 0.95 $ is cleared, the next targets of 1.0 $ and then 1.1 $ are achievable, before the longterm direction will be decided.
Currently, visible ask orders require at least 33 k USD for a new all-time high (apart from the additional dark orders).

2) A break down below 0.8 $ will bring the bears back into power with likely target of 0.4$ - 0.5$. This will then likely be associated with strong selling volume - and the bears will battle with the longterm bulls to hold / break the 1 year uptrend.


Have a great evening, bitbulls and bitbears :-)

http://posterous.com/getfile/files.p...caled.1000.jpg

Next update: Wednesday, 9th.

Your S3052

As promised here is tonight's bitcoin technical update. As some of you might have realized, I have moved to a Monday & Thursday rhythm for the technical analysis. In case the market starts again to be more dynamic and I get some of your support via donations, I might move to a shorter rhythm again.

Please donate here:

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Overall, the longtern forecast is fully on track. Longterm: rally. Short-term: still in consolidation, while breakout gets more likely every day or even hour.


Analysis


1. Price action review over the past days:

Stepping back a bit and letting the pattern develop has proven to be the right strategy in this forecast (see last Monday's update).
As expected on Monday, prices have indeed broken out of the big triangle that formed from the longterm uptrend line and the downsloping trendline from the 1.10 $ high.(see chart from Monday attached)
Prices tested again the 0.8 $ level and this level held again.


2. Longterm outlook:

Our forecast is on track: We continue to be in a longterm price rally as long as the 0.5 $ - 0.4 $ area is intact.
A decisive break of 1.0 $ and better 1.1 $ (previous all-time-high) is needed to bring the bulls fully back into the lead.

http://posterous.com/getfile/files.p...10310daily.png


3. Short term update

After moving down out of the bigger triangle, prices formed yet another triangle. Those of you who follow my analysis since Sep 2010 know that BTC seem to like triangles. We have seen already 3 of them, all resulting in break outs to the upside.

But let's stick to the factual options:
1) A break above the downsloping trendline (currently at around 0.89 $) will likely lead to upside towards 0.95 $. "The order book is still full with big selling volume at this level (at least in bitcoin-relative terms). Only if 0.95 $ is cleared, the next targets of 1.0 $ and then 1.1 $ are achievable, before the longterm direction will be decided."

2) "A break down below 0.8 $ will bring the bears back into power with likely target of 0.4$ - 0.5$. This will then likely be associated with strong selling volume - and the bears will battle with the longterm bulls to hold / break the 1 year uptrend."

http://posterous.com/getfile/files.p...0310hourly.png


Next update, Monday March 14th, 2011.
Your S3052


Disclaimer: Please always do your own due diligence, and consult your financial advisor. Never invest unless you can afford to lose your entire investment.

Here is a special short term bitcoin technical update.

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Bitcoins really like triangles, not only in the medium or longterm, but also short term.

Over the past day, another triangle has formed, again with the likely outcome of a breakout to the upside.

Prices should soon break above 0.90 $ and move towards 0.93 - 0.95 $.
http://posterous.com/getfile/files.p...0312hourly.png



Your S3052

Disclaimer: Please always do your own due diligence, and consult your financial advisor. Never invest unless you can afford to lose your entire investment.

As promised here is tonight's bitcoin technical update. As some of you might have realized, I have moved to a Monday & Thursday rhythm for the technical analysis. In case the market starts again to be more dynamic and I get some of your support via donations, I might move to a shorter rhythm again.

Please donate here:

1P8iS7WLx5n4ixThBRCPEPk9A3dR8bV6qt

Overall, the longterm forecast is fully on track. Longterm: RALLY. Short-term: it seems that BTC have started the next upmove after the 1.5 months consolidation.


Analysis


1. Price action review over the past days:

As forecasted, prices have indeed broken out of the big triangle that formed from the longterm uptrend line and the downsloping trendline from the 1.10 $ high.


2. Longterm outlook:

Our forecast is on track: We continue to be in a longterm price rally as long as the 0.5 $ - 0.4 $ area is intact.
A decisive break of 1.0 $ and better 1.1 $ (previous all-time-high) is needed to bring the bulls fully back into the lead.

http://posterous.com/getfile/files.p...10314daily.png

3. Short term update

The break above the downsloping trendline has opened up potential to reach 0.95 $, 1.0 $ and then 1.1 $, which is the all-time-high.

A break down below 0.8 $ will likely lead to a decline towards 0.4$ - 0.5$. This will then likely be associated with strong selling volume - and the bears will battle with the longterm bulls to hold / break the 1 year uptrend.


Trade well!
Next update, Thursday March 17th, 2011.

Your S3052

Disclaimer: Please always do your own due diligence, and consult your financial advisor. Never invest unless you can afford to lose your entire investment.

As promised here is tonight's bitcoin technical update.

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Overall, the longterm forecast is fully on track. Longterm: RALLY. Short-term: Bitcoins had a false break out of the triangle and is now poised to test and potentially break down below 0.8 $.


Analysis


1. Price action review over the past days:

After prices broke out above the downsloping trendline from the 1.10 $ high, BTC/USD broke down again with rising volume towards 0.81 $ today. This is a bearish development.


2. Longterm outlook:

We are still in a longterm price rally as long as the 0.5 $ - 0.4 $ area is intact.
A decisive break of 1.0 $ and better 1.1 $ (previous all-time-high) is needed to bring the bulls fully back into the lead.
http://posterous.com/getfile/files.p...10317daily.png

3. Short term update

The decline from the March 11 high of 0.93 $ to 0.81 $ today indicates that short term, the bears gained control again. There is very strong selling volume in the orderbook that is forming strong overhanging resistance.

A break down below 0.8 $ will likely lead to a swift and impulsive (crash-alike) decline towards 0.4$ - 0.5$.


Trade well!
Next update, Monday March 21st, 2011.

Your S3052

Disclaimer: Please always do your own due diligence, and consult your financial advisor. Never invest unless you can afford to lose your entire investment.

As promised here is the bitcoin technical update (a bit earlier in the day than normal).

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Overall, the longterm forecast is fully on track. RALLY. Short-term: The Bitcoin downtrend is either continuing further or is already over.


Analysis

1. Price action review over the past days:
BTC/USD broke down through the important 0.8 $ support and since then has immediately shown accelerated selling, reaching 0.71 $ with rising volume. BTC/USD is down -36% from the high. The bears are in still in control.


2. Longterm outlook:
We are still in a longterm price rally as long as the 0.5 $ - 0.4 $ area is intact (see lower red trendline in chart, currently at 0.45 $).
I added in one chart the 5 Elliott Waves from Oct 10 which look impulsie, while the decline from the 1.1 $ high looks only corrective (a-b-c). This is a good argument for the longterm bulls.
A decisive break of 1.0 $ and better 1.1 $ (previous all-time-high) is needed to bring the bulls fully back into the lead.
Remember, reaching 1 $ again means an upside of 30% from corrent levels which is significant.
http://posterous.com/getfile/files.p...10319daily.png

3. Short term update
I ran an in-depth analysis and see 3 alternate scenarios for the coming days and weeks:

i) BTC/USD has finished or will finish the consolidation at around the 0.7 $ level very soon.
There is probably a final small sell off needed to put a low in place, but this is not required. Prices may start rising again soon from the 0.74 - 0.76 area.
Rationales for this option: i) 0.7 $ has been an area of strong up volume in Jan/Feb and may provide solid support. ii) the 36% retracement is very close to a typical 38.2 fibonacci retracement for bull markets.

ii) BTC/USD will correct down towards 0.60 $.
Rationales for this option: i) 0.60 $ marks the lower line of the parallel trendchannel (see chart), ii) 0.60 is a 46% retracement from the high which is close to the 50% fibonacci retracement, another common target for corrections.

iii) BTC/USD will correct down towards 0.40 - 0.50 $ (and potentially further) in a CRASH-type selloff.
Rationales for this option: i) 0.40-0.50 $ is the area of the longterm trendline which should be very strong support. ii) 0.40 $ is a 63% retracement from the high which is close to the 62.8 fibonacci retracement, another very common target for corrections.

Now the question, which is the more likely scenario? Personally, I would give the options the following likelihoods:
Option i) high
Option ii) low
Option iii) medium

http://posterous.com/getfile/files.p...0319daily2.png

In any case, a rise above 0.80 $ and then a 1-3 day close above 0.88 - 0.90 $ (downsloping resistance line) will probably announce the start of the mext major rally. First to 1.0, 1.1 $ and then to much higher levels.
As mentioned before, significant fund inflows are needed to achieve this.

Trade well!
Next update, Thursday, March 24th, 2011.

Your S3052

Disclaimer: Please always do your own due diligence, and consult your financial advisor. Never invest unless you can afford to lose your entire investment.

As promised, here is tonight's Bitcoin technical update.

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Overall, the longterm forecast is fully on track. RALLY. Short-term: The highest likely forecast from Monday has materialized: Bitcoin is back in the RALLY.


Analysis

1. Price action review over the past days:
Prices bottomed as expected in the 0.71-0.74 area and have since then rallied sharply. BTC/USD is up +27% in only 3 days.
The buying volume confirms the new rally trend.


2. Longterm outlook:
No change to Monday's analysis: "We are still in a longterm price rally as long as the 0.5 $ - 0.4 $ area is intact (see lower red trendline in chart, currently at 0.45 $).
I added in one chart the 5 Elliott Waves from Oct 10 which look impulsie, while the decline from the 1.1 $ high looks only corrective (a-b-c). This is a good argument for the longterm bulls.
A decisive break of 1.0 $ and better 1.1 $ (previous all-time-high) is needed to bring the bulls fully back into the lead."
(refer again to Monday's Elliott wave chart)

Once 1,10 $ is cleared significantly, prices may accelerate towards 1.5-1.7 $ and 2 $ quickly.


3. Short term update
After the breakout above the downsloping trendline (today at around 0.86 $), next resistances are 0.9 $ (very weak), 0.95 $ (strong), 1.0 (medium), 1.1 $ (strong) - before much higher levels are probable.

http://posterous.com/getfile/files.p....scaled980.png

Support levels are now the broken trendline (0.86 $ and falling approx. 0.08 $ per day), and then 0.8 $.


Trade well!
Next update, Monday, March 28th, 2011.

Your S3052

Disclaimer: Please always do your own due diligence, and consult your financial advisor. Never invest unless you can afford to lose your entire investment.

Hi Followers,

1. You can follow my Bitcoin Market and Technical Analysis in realtime via Twitter now. I cover BTC/USD.

2. I will also start to cover Gold in USD, Silver in USD, S&P500 and Nasdaq 100 markets as of now

http://twitter.com/#!/S3052

Here is a special Bitcoin technical update, because as of today, my analysis can be found regularly on http://blog.bitcoinwatch.com. Thanks to tcatm, owner of bitcoincharts.com and bitcoinwatch.com !!!

Please donate here if you wish to see the Bitcoin Market Coverage continued:

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Overall, the forecast is fully on track:

Longterm: RALLY.

Short-term: Bitcoin is in an uptrend, as long as 0.8 $ and 0.7 $ holds.



Analysis

1. Price action review over the past days:
Prices have rallied +27% in only 3 days, from 0.71 $ to 0.905 $. Since then, BTC/USD has retraced 50% of this rise to 0.8 $, which is a standard correction.

Price rallies have been encompassed with stronger volume than declining phases (as evident in the volume bars in below chart)

2. Longterm outlook:
The longterm forecast is fully as predicted (see previous updates here).

As long as BTC/USD stays above the 0.5 $ - 0.4 $ area the rally is on track and we should see prices making several all time highs in 2011. Next big target is 1.7-2.0 $, then 5$, 10 $.



Volume trends are healthy (see volume patterns in chart below: rally volume increasing, declining volume decreasing)

http://blog.bitcoinwatch.com/wp-cont...10327daily.png



3. Short term update

After the 0.71 $ low 10 days ago, prices have displayed an impulsive rally to 0.905 $ yesterday.

I have labelled the rally pattern in the chart below. And as you can see, one can count an almost "Elliottwave textbook" advance in 5 waves (1-2-3-4-5). This 5 wave advance is part of a bigger scale 5 wave advance, which we label wave I for the time being. After that completed impulse wave, a downward wave II has developed. This wave is either already over (a-b-c zigzag), or will be more complex (i.e. w-x-y, see alternate count on the bottom of the chart). Once wave II is over, we should see an acceleration of the rally as we enter wave III. Third waves are typically the strongest waves and offer surprises in strength.

(Please let me know if you want to continue to see this level of detail in my analysis, Elliott wave is a great tool to identify patterns and predict price actiosn already ahead of other trendfollowing tools).

What are the key levels to watch, to determine if the rally stays intact?

One resistance level is 0.81 $ (yesterday's low).

However, the more important level now is 0.71 $. Under the above wave count and rally forecast, this level must hold (1st wave can never be retraced by more than 100%).

If 0.71 $ breaks, we re-enter the correction phase and can quickly see a test of the 0.4-0.5 $ longterm support line.

If the rally forecast and the wave count are correct, next short term targets for BTC/USD are 0.95 $, 1.0, 1.1 $ - before much higher levels are probable.

http://blog.bitcoinwatch.com/wp-cont...0327hourly.png


Trade well!

Next update, Thursday, March 31st, 2011.

Your S3052



Disclaimer: Please always do your own due diligence, and consult your financial advisor. Never invest unless you can afford to lose your entire investment.

As promised, here is tonight's Bitcoin technical update. I analysed both, short and longterm picture over the weekend.

Please donate here if you wish to see the Bitcoin Market Coverage continued:

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Overall, the forecast is fully on track:

Longterm: RALLY.

Short term: Bitcoin / USD is in a downtrend, unless 0.8 $ is broken to the upside.

Color legend: Green: UP, Purple: SIDEWAYS, Red: DOWN.



Analysis

1. Price action review over the past days:
BTC/USD have indeed worked their way down (as anticipated in the last update), moving down to 0.72 $ (-8%) after reaching the underside of the 0.78 $ - 0.80 $ resistance band.


2. Longterm outlook:

Price are in a huge correction/consolidation from the all time high of 1.10 $. This is the longest downtrend since start of trading in May 2010. Actually, March 2011 was the first ever down month for BTC/USD.

Still, as of today, BTC/USD is up on average +58.2% per month over the past 11 months. Gold, for comparison, is only up by +2.2% monthly (see chart I created today).



From a technical standpoint, the correction/consolidation looks bullish, as prices have formed a down-sloping parallel trend channel, often referred to as "Bull Flag".



What does this mean: The current consolidation may go on for longer. But as soon as prices break out of this channel, either (i) the rally continues or (ii) we see a major breakdown/crash.

http://blog.bitcoinwatch.com/wp-cont...409monthly.png


http://blog.bitcoinwatch.com/wp-cont...10409daily.png

When looking at the longterm nominal chart above, it is clear that the 0.5$ area remains major support: (1) 200d exponential moving average, (2) longterm uptrend line, and (3) close to last weeks low of 0.56 $.

This support must hold for the longterm future of bitcoins.

As long as BTC/USD stays above the 0.5 $ level the bull market is on track and we should see prices making several all time highs in 2011. Next big targets are 1.7-2.0 $, and then psychological levels of 5$, 10 $.

A break to the upside requires BTC/USD to exceed 0.8$.

Of note, as one watch out, the long term trend on a log scale has already been broken (see chart below). A rally above 1 $ will help to bring this chart also back into bull territory. The next months will show which chart is more significant, the log or the nominal scale.

A fast break above 1 $ will eliminate all doubts.


http://blog.bitcoinwatch.com/wp-cont...09dailylog.png






3. Short term update

Prices continue to be in the downward move as part of the longer term bull flag.

http://blog.bitcoinwatch.com/wp-cont...0409hourly.png


We are already into the second leg of a downmove. The key question is "how far". Well, as said earlier, corrections are far more difficult to forecast than impulsive rallies.

Short term, a break below 0.71-0.70 $ will likely lead to a second test of the 0.56-0.50 $ area.

Between 0.70 and 0.80 $ the market is in a neutral , sideways zone, which still offers traders a 10% window.

If prices break above 0.8 $ next targets for BTC/USD are 0.90 $, 0.95 $, 1.00 $, 1.10 $ - before much higher levels are probable.



Trade Bitcoins well!

Next update, Thursday, April 14th, 2011.

Your S3052



Disclaimer: Please always do your own due diligence, and consult your financial advisor. Never invest unless you can afford to lose your entire investment.

Brief update on the occasion of the 3rd highest trading day ever on Bitcoins (in $ terms).

This update is simple. All indicators and patterns bullish.
LONG TERM: Up
SHORT TERM: Up

After strong break out above 0.8$ we immediately jumped to next resistance 0.9$ as predicted in last analysis. As long as prices stay above 0.8 $, the rally is intact.
Next resistances: 0.90$, 0.95$, 1.00$, before the all time high can be attacked by the bulls (1.10$). Surprises on the upside expected.

Donations: 1P8iS7WLx5n4ixThBRCPEPk9A3dR8bV6qt

http://blog.bitcoinwatch.com/wp-cont...10412daily.png

Next update, Thursday, April 14th, 2011.

Your S3052



Disclaimer: Please always do your own due diligence, and consult your financial advisor. Never invest unless you can afford to lose your entire investment.

As promised, here is tonight's Bitcoin technical update, covering as usual both, short and longterm trends.

Please donate here if you wish to see the Bitcoin Market Coverage continued:

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Overall, the forecast is fully on track. BTC/USD rallied +78% over the past 10 trading days. BITBULLS are alive again.

Longterm: RALLY.

Shortterm: RALLY.

Color legend: Green: UP, Purple: SIDEWAYS, Red: DOWN.



Analysis

1. Price action review over the past days:
As forecast, BTC/USD have indeed broken impulsively above 0.8$ and also above 0.9$, which paved the way to PARITY again.

To demonstrate the way our forecast was fulfilled, here two charts: one before (published on April 12th here) and one today, after the breakout.

April 12th
http://blog.bitcoinwatch.com/wp-cont...410hourly1.png




April 14th (today)
http://blog.bitcoinwatch.com/wp-cont...10414daily.png








2. Longterm outlook:

Price are in the next phase of the longterm Rally. The largest correction/consolidation from the all time high of 1.10 $ can be declared over.

A break above 1.00 $ will accelerate the uptrend.

Longterm support remains the 0.5 $ level. "the bull market is on track and we should see prices making several all time highs in 2011. Next big targets are 1.7-2.0 $, and then psychological levels of 5$, 10 $."

From an Elliott Wave (elliottwave.com) perspective, we may well be in a third wave up (when counting the entire upmove from the inception of bitcoins to the 1.10 $ all time high as the first big wave 1, subdevided in 5 impulsive waves, which is a valid count).

Third waves are the strongest waves and almost always surprise on the upside. The strong volume over the past days supports this view.



3. Short term update

Prices are in rally mode also in the very short term. Given the huge rally from the 0.56$ low just 10 days ago, we may see some pausing below 1.00 $. However, this is not required and it might be dangerous to bet on the downside. Again, third waves are strong.

Only a break below 0.9$ would initiate a more protracted consolidation. Above, the BITBULLS remain in control.

http://blog.bitcoinwatch.com/wp-cont...0414hourly.png




Trade Bitcoins well!

Next update, Thursday, April 14th, 2011.

Your S3052



Disclaimer: Please always do your own due diligence, and consult your financial advisor. Never invest unless you can afford to lose your entire investment.

As promised, here is tonight's Bitcoin technical update, covering as usual both, short and longterm trends.

Please donate here if you wish to see the Bitcoin Market Coverage continued:

1P8iS7WLx5n4ixThBRCPEPk9A3dR8bV6qt



Overall, the forecast is fully on track. BITBULLS in the lead by a distance BITBEARS asleep.

Longterm: RALLY.

Shortterm: RALLY.

Color legend: Green: UP, Purple: SIDEWAYS, Red: DOWN.



Analysis

1. Price action review over the past days:
Consolidation in tight range between 1.13 - 1.20 $, after +214% rise in 2 weeks.

2. Longterm outlook:

Clear rally. No change in outlook. Next big targets are 2.0-2.3 $, and then psychological levels of 5$, 10 $.

3. Short term update

Forecast on track, according to Mondays analysis: "BTC/USD continue to rally strongly, with rising volumes. After breaking through the 1.10 $ previous all time high, prices may consolidate sideways over the next days before continuing the rally." This has happened and now, BTC/USD seems to be on the verge of the next breakout from the ascending triangle.

http://blog.bitcoinwatch.com/wp-cont...0421hourly.png

A break below 1.10 $ may lead to a re-test of 1 $ parity.

Only a break below 0.9$ would initiate a more protracted consolidation. Above, the BITBULLS remain in control.





Trade Bitcoins well!

Next update, Monday, April 25th, 2011.

Your S3052



Disclaimer: Please always do your own due diligence, and consult your financial advisor. Never invest unless you can afford to lose your entire investment.

Here is a special long term Bitcoin technical update.

Please donate here if you wish to see the Bitcoin Market Coverage continued:

1P8iS7WLx5n4ixThBRCPEPk9A3dR8bV6qt



Overall, the forecast is fully on track.

Longterm: RALLY.

Shortterm: RALLY.

Color legend: Green: UP, Purple: SIDEWAYS, Red: DOWN.



This is a special analysis to determine the longterm trend and trying to look more into the future (weeks and months).

As you will see in the two charts below, there are always challenges for the analyst. There are two ways to chart BTC/USD, and both represent valid options. (1) normal chart and (2) log-scale chart. One can argue to use both equally, and in fact it is always good to look at both. The clearer the picture and the more unified the conclusions, the clearer the outlook.

In the case of BTC/USD, both charts show how perfectly bitcoins follow textbook like chart patterns.

Prices respect trendlines really well. Now, to the question: What will the next weeks and months bring?

Here are the scenarios:

(a) A further acceleration of the rally. Looking at the normal chart, one can make the argument that prices have already broken above the upper trendline. If this is the case, we should see confirmation of an acceleration over the next 5-10 trading days. This acceleration could very well lead to quick rises to 5, 10 $ and beyond (these are psychological levels, I will try to look into fibonacci target levels once we see a confirmed breakout).

If this view is correct, prices have no right to trade significantly below 1.6$ any more.

http://blog.bitcoinwatch.com/wp-cont...4dailynorm.png



(b) A pause in the rally and consolidation / correction. This means that prices would remain in the parallel trend channel that can be drawn in the log-scale chart (below). A break above 2.0 - 2.3 $ is needed to open the accelerated rally option (b) as explained above.

If prices fail to break this level, we still remain in the longterm rally, as long as we trade above the rising lower trendline (currently around 0.8$). A break below this level would lead to option (c), a strong phase of declines.

http://blog.bitcoinwatch.com/wp-cont...10424daily.png


In summary, we are at an exciting juncture for bitcoins. The market is very healthy, with rising technical strength and rising buying volume. Although one can make the case that we are in an overbought condition (see RSI well above 70), there can be surprisingly big upside before even a short term top. And the increasing calls in the bitcoin.org forum that the rally is over shows that some people still have missed the bull-train.

Based on my analysis and experience in this market, the likelihood is high that we see continued rises (after pausing a couple of days in a sideways / triangle pattern, while this is not required).

Shorting the market now might be more risky than keeping running with the bulls.



Trade Bitcoins well!

Next update, Thursday, April 28th, 2011.

Your S3052



Disclaimer: Please always do your own due diligence, and consult your financial advisor. Never invest unless you can afford to lose your entire investment.

As promised, here is tonight's Bitcoin technical market update.
Technical Analysis

Please donate here if you wish to see it continued:

1P8iS7WLx5n4ixThBRCPEPk9A3dR8bV6qt



Longterm: RALLY.

Shortterm: RALLY.

All lights on GREEN for the Bitbulls.

Color legend: Green: UP, Purple: SIDEWAYS, Red: DOWN.



Analysis

1. Price action review over the past days:
As predicted, BTC/USD saw a significant decline: from the previous top of 8.9$ prices crashed -37% to 5.6 $. This decline came close to a common 38.2% Fibonnacci retracement.

The 38.2% is a common mininum retracement. BTC/USD turned around after hitting this minimum correction target. BTC/USD rallied +69% in just 5 days, and made another record high, at record currency volume.

This is surprising and not surprising at the same time. i) Surprising because the BTC/USD market shows a beautiful technical strength, far stronger than any other financial market over the past years. Further declines towards the 4.7-5.3$ and lower levels have not materialized.

ii) Not surprising, because we have already mentioned this outstanding technical strength many times before.





2. Longterm outlook:

The longterm "BitBull-Market" is in full force. My sentiment analysis also shows further upside potential.

After more price action over the past days, another parallel trendchannel has formed (see purple lines). The channel target is in the 18$-22$ price range, depending on when the upper line will be reached.

http://blog.bitcoinwatch.com/wp-cont...26dailylog.png

As previously mentioned, a break below the 5$ area would again activate a deeper correction towards 3.5 - 3.7 $ and ultimately 1.2-1.3$.



3. Short term update

As said in the last special update, a break above the downsloping trend line (ligth blue) will in all likelihood reignite the rally and lead to new all time highs. And so it happened.

Now, the way is free to hit the psychological 10 $ mark, which it probably will. A strong break above 10$ will likely lead to another rally acceleration towards the above mentioned 18-22 $ zone.

http://blog.bitcoinwatch.com/wp-cont...0526hourly.png

As long as the 7.8-8.2$ range holds, this level is in the cards. A break below would be the first warning sign that the latest rally leg has ended.







Trade Bitcoins well!

Next update, Monday, May 30th, 2011.

Your S3052



Disclaimer: Please always do your own due diligence, and consult your financial advisor. S3052 owns some bitcoins. Never invest unless you can afford to lose your entire investment.