I think that the bounce from 3.8$ is now completed, the weekly moving average is flattening out at 5$ where we have a series of daily highs with rising lows (ascending triangle), it’s time now to take a decision to break or not 5$ level for a first target at 5.4$, it’s mandatory now otherwise sellers will take again the control on this market pushing the prices back again to 4$.

Without this breakout of the 5.2-5.4$ zone i think that the BTC/USD will probably continue to consolidate in the 4$-5$ zone in the weeks to come.

During the last 3 weeks of rebounding prices i’ve noticed a slighty positive net volume, sign of a timid comeback of buyers.

The weekly moving average is acting
now as resistance, the BTC/USD after a strong bottom at 3.8$ rebounced exactly to my average at ~5.2$. I’ve seen a huge increase in the selling pressure during that bottom as it is visibile in the long negative net volume bar.

Without a proper breakout of the 5.2-5.4$ zone i dont think that the trend will reverse again to the upside going above the previous top at 7.2$, consequentally i expect for march a consolidation around these price levels (3.5-5.4$).

This is a weekly view since october 2011. It is visible the November low at 1.94$ and the recent top at 7.2$, in the second pane of the chart there is the net volume and it’s clearly visible how it moved from a positive situation to a negative one. The weekly ALMA moving average has now a downward slope, confirming this phase as corrective.

I think that the underlying long term is still intact, despite a month of selling pressure the price isn’t crashed to 2$ or even lower, i’ll evaluate to open another short term trade when i’ll have bullish indications from the 4hours and the daily chart.

I’m going to show you a new concept that i’ve introduced in the recent posts, the “net volume” or a security’s uptick volume minus its downtick volume over a specified period, in this chart it’s 1 week. It is a main concept the “net volume” for the trader that trades on volume togheter with “volume at price” and “vwap” or volume weighted average price; all tools aimed to understand when and where to trade using volume data.

Well, going back to our chart on the left you can see how it’s developing a strong net volume weekly bar very similar to what we’ve seen in the april-june bull market. This is very positive and it means that buyers are getting in again after a prolonged period of weakness. I think that the net volume it’s a nice tool to confirm the presence of an uptrend/downtrend and you can rely on it for your trading decisions

I’m still long from 3.22$ and i basically bought after 2 consecutive weeks of positive net volume, a confirmed long signal with the weekly inverse RSI fisher transform oscillator and a slightly positive weekly moving average.

After a while i come back to check how is going this exchange founded by Jered Kenna in June. The volume increased after the first two months of sluggish activity; also here we have a confirmed buy signal from the inverse RSI fisher transform indicator and the weekly moving average that reversed this week.

Compared to the MtGox the price action is more stable because volatility doesn’t change so much like in the other one japanese exchange, probably because large players aren’t trading at Tradehill.

Recently i’m starting to observe better the volume activity on these bitcoin exchanges (virwox included) instead of looking only the MtGox. It is important, as i said in the bitcoin forum yesterday, to observe the Net Volume and not only the volume raw value. To compute the Net Volume we should do the difference beetween volume made on an Uptick and volume made on a Downtick for a particular bar (daily weekly or whatever you want). So watching carefully the net volume and how it develops with the pass of time is possible to better understand if this pressure is positive or negative and where it is headed. In this particular case, at TradeHill, the net volume started to become positive well before the market reversal giving to the smart investor a nice hedge.

At the moment the only way to compute the Net Volume is using the Sierrachart platform and the plugin made by Slush to grab data from bitcoincharts.com , then you can add to the chart the uptick downtick indicator, eventually export the data to excel for further data processing.

 

As i said in the last post, for the first time in five months the weekly moving average i use turned bullish and also  the inverse Fisher Trasnform Relative Strength Index or RSI crossed the buying thresold located at -0.5  confirming the weekly uptrend.

I think this is a nice buying opportunity like the other one happened in mid april at ~0.7$; now the next step is to break the first important static level at 4$, a move that will bring more buying power so to reach a first important target in the 7$ zone.

For the first time in five months the weekly moving average i use is turning bullish. Last time that this happened the BTC/USD moved from 0.56$ to 32$, i think that this market found a strong equilibrium at around 2$ and it is starting to reverse to the upside, i can’t forecast the exact intensity of this potential upswing but at least i can give it a try, this is why i bought today 100 btc and i’m planning to buy again above 3.8$

The inverse Fisher Trasnform Relative Strength Index or RSI is easing from an oversold position and going towards the buy thresold located at -0.5, when the fisher RSI will trigger a buy signal the BTC/USD will be probably above 3.8$ confirming the weekly uptrend.

I think that this could be a tremendous buying opportunity like the other one happened in mid april at ~0.7$; the first important static level to break is 4$ and then i have a forecasted level at around 7.5$ ( assuming average volatility) as first major weekly resistance to be met within first half of 2012. I’ve to note also that the mining difficulty is starting to rise again, in response to the recent bullish behaviour.

So far BTC/USD failed to go through 3.8$ but at least the weekly moving average is stabilizing after a fall of 4 months, since June. What doest it mean? well that at least prices are stabilizing in the 2.5$-3.5$ zone.  For now i think that the 2$ level should work for this month as support, resistance slightly under 4$.

The oscillator of course is still oversold, once it will cross the buy thresold and prices are above 4$ i’ll evaluate to open a long position or not.

As i explained in one of my previous post the Ross Hook is an elegant and clean method to trade stocks/commodities.
Here the BTC/USD, after a severe downtrend from 7$ to 2$, looks like it has reversed its direction following a 123 formation  (i repeat that a ross hook must occur after a 1-2-3 trend reversal formation has taken place) and make a Ross Hook at 3.82$, 3 days ago.
This price level was also an old bottom (7 october) now  of course resistance, BTC/USD going above 3.8$-3.9$ means also that my weekly moving average will reverse to the upside after a fall of many months, it could be a good buying opportunity if this scenario will materialize.

After failing again to break through my weekly moving average the BTC/USD moved to a new low of 2.26$, continuous failures to go above my reference weekly moving average is a confirmation of the overall bearish outlook at least on a weekly basis. I can speculate to project a new bottom and i’ve a new support at 1.50$ to be reached by the end of november. Also if i extend the current trajectory of my ALMA weekly moving average it will reach 1.5$ again by the end of November.

Considering that BTC/USD is always under my weekly average, it is a true possibility to see 1$ or even lower (due to a fast dip) in a month and a half from now.

After failing to break through my weekly moving average the BTC/USD moved back to a short term downtrend with a lower top at 6.8$ after the previous one of 7.3$; i initially though that a bounce to 8.5$ was possible  but i was wrong, the market failed to going above 7.3$

At this point i’m not so sure about the main 4.2$ bottom, continuous failures to go above my reference weekly moving average is a confirmation of the overall bearish outlook at least on a weekly basis. I can speculate to project a new bottom and i’ve a new support at 4.1$ using an halved volatility factor, with a standard value i have a level around ~3.5$ where i think strong buyers will come back for a new buying opportunity.

I think that the narrowing of the daily range of the last 5-6 days  it is a sign of exhaustion, especially since it has happened after the day the market just put in a selling  bar with high volume (~200000 bitcoins) on 9 september

As long as the  4$ bottom will hold i think that a bounce to 8.5$ or so will materialize in the upcoming weeks. At 7.5$ there is  my weekly moving average that so far worked very well, a penetration of that moving average will be a good sign of improvement for the long term trend. Thus i recommend to open a long term trade only after a clear breakout of 7.5$ using 4-4.5$ as stop loss.