BTC/USD Technical Analysis – 12th May 2014

Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term has fallen from a week high of 445 yesterday morning to a low of 426, followed by some retracement; it now seems there's going to be some consolidation for the next few hours.

During my technical analysis on Bitcoin over the weekend, I posted the following chart:

Which affirmed my prediction from last week that price was going to rise and test the 23.6% Fibonacci retracement level, which ultimately would prove too strong of a resistance for it to pass.

In addition to the resistance at the 23.6% Fib, we had some other technicals which aided in price dropping as it did, for this we'll need to zoom into the one hour timeframe on BTC/USD, as can be seen below (click to expand):

Take a look at the candle in a white ellipse in the top left corner of the chart, this the LAST candle to have tested the 23.6% Fib from the first chart above, and as we can see it's the embodiment of a classic reversal signal, due to it essentially being a shooting star, possessing a long upper wick, with a short lower body, and a minimal lower wick. When such a candlestick appears after testing a key Fib level, then it's imperative to seek other corroborating bearish technicals. So on that note, on the very next candle, we had the Accelerator Accelerator An accelerator or startup accelerator is defined as fixed-term programs that look to foster investment, connections, sales, and education to kindle growth in a project.Most commonly this effort constitutes a public pitch event, demos, and other forms of marketing. Startup accelerators are most commonly associated with Silicon Valley, a global hub for investing and fintech.Startup accelerators however are a global phenomenon that privately funded as an investment fund. This nature of investing he An accelerator or startup accelerator is defined as fixed-term programs that look to foster investment, connections, sales, and education to kindle growth in a project.Most commonly this effort constitutes a public pitch event, demos, and other forms of marketing. Startup accelerators are most commonly associated with Silicon Valley, a global hub for investing and fintech.Startup accelerators however are a global phenomenon that privately funded as an investment fund. This nature of investing he Read this Term Oscillator turn red, and a couple of candles later the Stochastics were crossing down along with the Parabolic SAR dots above the candles, and the Awesome Oscillator as red, basically we had a multitude of bearish signals, which helped price eventually fall down to 426. If you notice, the move was very consistent, without a single interruption on both the two main trend indicators, i.e. the Awesome and the PSAR.

I've applied the Fibonacci study on the H1 chart to the two points mentioned at the very top, i.e. from 445 to 426, and we can see how price retraced up to the 38.2% Fibonacci level at 434, testing it on a number of occasions, marked in red.

With the resistance at 38.2% holding up for now, it's virtually inevitable price is going to fall back down to the 23.6% Fib level, and I'd expect some ranging to occur between these two levels for the next few hours.