Bitcoin has fallen a bit during the trading session, reaching towards the $13,500 level, only to find buyers. I think there is plenty of support underneath, especially down at the $13,000 level, so therefore a bounce is not a huge surprise. The $16,000 level above is massive resistance, so therefore I think we won’t find any opportunity to break out in the short term. I think that the market continues to go back and forth, and as a result I think that short-term traders will continue to flock to this market, perhaps using something like the stochastic oscillator as a signal. The markets will probably continue this behavior until after New Year’s Day, where we have more volume coming into the marketplace. Quite frankly, it’s difficult to anticipate how this market will behave in low volume, as this is the first year of Bitcoin being a major market. So far, it is behaving very much like the other currency markets, so I don’t think there is a major difference as far as that is concerned. Beyond that, you have to worry about the fact that the Bitcoin markets have been overbought for a significant amount of time, so it’s likely that the traders out there are looking at this as a potential cooling-off period, which is exactly what Bitcoin needs.
BTC/USD Video 29.12.17
If we did breakdown below the $13,000 level, we will more than likely go down to the $12,000 level, which of course would be supportive. A breakdown below that level sends Bitcoin down to the $10,000 level, an area that I think a lot of people are expecting to be retested given enough time. In general, I believe that the uptrend is still intact, but exhaustion that most traders are feeling must be extreme. The alternate scenario of course is a breakout above the $16,000 level, which would send this market much higher, probably towards $18,000 next. A break above there should send this market to the $20,000 level, which is the would send the market back towards the all-time highs again. We probably won’t see that until January though.