Analysis provided by Bitcoin BullBear.
The absence of volatility made an abrupt exit this week as prices moved down 30%, rallied 20%, and have now stabilized somewhat above $500. While we are not ready to call a bottom at $442, things are lining up nicely for the bulls in the short term.
What an interesting week in Bitcoinland! There has been a news vacuum relative to the past few weeks while prices have returned to roller coaster mode. This tells us that at this point in its development, BTC is still a technical and speculative asset that acts as such, and is not as influenced by exogenous events as people perceive or was true in the past. Also, this is a great example of “the trend is your friend” as despite a spate of good news coming out over the last few weeks, the downtrend was simply too powerful to be deterred.
With that in mind, we think it is important to note that the current $442 low fits perfectly in line with our view that the market is nearing the end of an Inverse Head and Shoulders consolidation that, should it hold, portends substantially higher prices in the coming months. This is not to say that another run down to retest $442, or even $400, could not occur at any moment; however, we think that a bottom will be found above the spring $339 low in the not too distant future.
Key levels to watch over the coming week are $442, $452, and $475 to the downside, while $539 and $600 are key levels to the upside.
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