BBA Bitcoin Warrior Weekly Recap (September 4, 2014)
At this time, there are no signs that either a breakdown or breakout is coming in the near future. That being said, the overall technical picture continues to develop nicely for the bulls given a longer term time horizon. Watch $442 and $534 as key support and resistance.
This week we want to take a slightly different look at Bitcoin to put things into perspective. You can see that at current prices, price history and regression analysis shows BTC as very undervalued, which we can only interpret as a long term buy signal. Not only that, but even on the short term charts there are signs of a bottoming process between $442 and $475. Those looking to add to longs can do so on pullbacks into this range. Shorts can look for a near term entries around the $511 and $534.
Just a broader note about markets in general, during somewhat frustrating times for both bulls and bears alike (right now, for instance), it can be easy to jump the gun on both the sell side and the buy side. Directionless markets are treacherous and can often lead to rash and emotional decisions (our true enemy as traders). With that in mind, we think extreme caution is warranted until a clearer technical setup emerges, which we expect to see in the not too distant future.
Key levels to watch over the coming week are $442, $452, and $475 to the downside, while $498, $511, and $534 are key levels to the upside.