BTC/USD Technical Analysis – 21st Feb 2014

Analysis provided by Ashton Fraser, learn more about his trading strategies at Forex Reversal.

After yesterday's drop, 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 managed to regain some of its losses. Let's take a look at the BTC/USD Hourly chart below.

I've circled a significant candle in blue. This candle is very important from a technical point of view. Look at how it opened, yet virtually closed below the lower Bollinger band. On it's own this is strong reversal pattern. But combined with other technicals, the probability of reversal is strengthened even further. This pattern always precedes any other technical indicators, so it's important to watch what happens over the next few candles to attain confirmation of any impending reversal.

Indeed, over the next couple of candles, we can see how 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 turned green, followed by the underbought Stochastics crossing over and heading upwards. Naturally, the Awesome Oscillator soon followed suit.

For me, this is a classic reversal pattern, and profit targets can be set at the subsequent Fibonacci levels. You can see how price reacted to practically every retracement level. First the 23.6% level, then the 38.2% level, then at 50%, unsurprisingly, seeing as though this was a strong reversal pattern, price went all the way up to the 61.8% Fib retracement level (around 577), marked in red.

Since then, price has dropped back down to the 38.2% Fib level. Interestingly, the Accelerator Oscillator has now turned red. I'd expect a further drop to around 540 before the day's end.