Analysis provided by Bitcoin BullBear.
It has been a fascinating week for us technicians as the price action in bitcoinland has given us alot to chew on. Of course we must mention “bearwhale” seeing as though he unleashed the largest single sell order in BTC history only to be rejected to the upside…
So, in the midst of the panic selling that occurred on late Sunday afternoon, some genius decided to send 30,000BTC to Bitstamp to sell into the madness. When the order showed up, prices fell 10%, then it was pulled which caused a huge 20% rally. Finally, bearwhale had enough and simply put the full 30k on offer for $300 even, which was 10% below the going market price at that time. Six hours later, the sell wall was gone, and prices were ripping higher.
It is fun to speculate about who bearwhale is and why he did what he did, although that is the much less relevant part of this story as far as we are concerned. The real story is the chart, which shows surprising resiliency in the face of so much negativity. Bullish divergences abound on the indicators, while sentiment remains extremely poor. This lays fertile ground for the bulls to pull the plow, and leads us to believe that there are legs to this rally.
That being said, the bear market has not been broken, a reversal has not been confirmed, and the weekly chart still looks ominous for the medium term. Although we think it is safe enough to participate to the upside from these levels, we also would caution those who get too caught up in the bullishness prior to a true resolution of a bottom. Play, but play carefully!
Key levels to watch are 347, 300, 275, and 260 to the downside, with resistance coming in at 397, 452, and 525.
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Disclaimer: Please always do your own due diligence, and consult your financial advisor.