Is it time for a double top? I made a slight modification to the unconfirmed downward trend line, the dashed blue, The dashed red is a confirmed trend marking the current rally. Top resistance is at $490 slightly lower than the blow-off top 5 weeks ago. Effectively we are still in the wedge I previously spoke of in an add-on note. I have to admit this rally has been surprisingly healthy with rising averaged volume along with a rise in price. A break to the upside beyond $500 would be a blast-off point for the next major move up (beyond $1200). On the less positive side, the rally is getting ahead of itself. with a two week surge that is begging for a retracement back to the trend line. A retracement would create a classic double top which traditionally is an omen. A downward break through the trend line would be setup for a major move down. The panic zone is still in the below $275 range.
Over the next few weeks I expect wedging action between the hashes. A break either way can occur. Study the volume moves on the daily chart for clues. I'm short term Neutral and very long term bullish. I don't think the market is ready to blast off in the next two months and I fully expect some bottom testing action.
I have noticed some fundamental information for the current rally which would be a solid justification for a breakout to the upside out of the wedge and above all known upside resistance. If we see a solid breakout in volume then I would change my current Neutral opinion to Bullish. There is movement in China towards currency controls and further devaluation of their fiat currency. This is fueling an exit towards crypto-currencies to preserve value. Also, the South African Rand is in a free fall and the South African government is in full panic. The SAR debacle has fueled the current rally and the China moves are going to have a longer term effect as they unfold.
If anyone has information on other currencies in trouble, please post them here. Thanks!
If anyone has information on other currencies in trouble, please post them here. Thanks!
zerohedge.com/news/2015-12-11/bitcoin-breaks-out-higher-after-china-announces-crackdown-unionpay-pos-devices
ewn.co.za/2015/12/12/Economists-concerned-the-rand-will-continue-its-freefall