0805bitcoins_2904543bWhen BTC/USD price slumped in the week beginning (August 18 flash-crash, which we wrote about here) and BTC-e valued the most popular cryptocurrency less than $308, many speculators and investors prophesied the end of Bitcoin (which takes place almost always when there is stronger price slippage), escaping from the market as fast as possible. Ultimately, the daily candle closed decisively higher ($435).

Another sessions has already resulted in price increases (quite rapid ones) and began small upward movements – now being placed around $506. We can raise here a obvious question: are we witnessing the beginning of a long Bitcoin upward rally or is it just a correction before further declines?

On the daily chart, we see that the BTC/USD price was in a broad consolidation ($550-655) which started in early-June and ended mid-August. During the August 13 session, there was a dynamic break below and the selloff, which ended with well remembered flash-crash. The first serious resistance of further increases is the lower band of consolidation range. Another one is little higher – downward trend line (now at $580).

pobrane

If the price reaches the aforementioned resistance and will not be able to break above it, we will consider short positions – of course only if D1/H4 chart shows a clear sell signal. Any rebound and end of the sideway trend could lead price to the $500, then $450 and possibly $425, where another, extremely important level is located.

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