Bitcoin May Be Settling Back into a Range
Bitcoin prices may be settling back into a trading range after the important Braintree news announcement failed to trigger a rally in the cryptocurrency (more on this here). Two days ago BTC fell to $459.70 but few hours later prices peaked at over $483 per coin. Since then however BTC/USD has eased back and is now trading below the $470 mark. This unpredictability is one of the marks that we may be entering another rangebound period.
What are the potential breakout points for bitcoin? On the top end, the round $500 figure needs to be left behind before the bulls can have any hope to turn the downward tide. On the lower end, while the most recent down move saw prices spike to a low of $460, it may be more prudent to wait for a break of $450 before making any bearish bets. This is because the range is fairly new and barely two days in the making. If you want to be on the safe side, wait a few more days for BTC to clearly define the outlines of the new congestion area.
Support and Resistance Levels
What are some of the potential support and resistance levels if the two breakout points mentioned above give way? On the top end, we have the August 21st swing high at $530. This is followed by the important $550 figure, a level that was strong support for bitcoin on the way down and will likely be a significant hurdle for the bulls on the way up. If BTC/USD can climb above, the crypto may put an end to the medium-term downtrend that has been in place for the entire 2014.
Below $450, the first small support can be found at the $400 round figure. But the real battle of the bulls and the bears will be fought between $330 and $350. This area was the stopping point for last month’s spike lower and will likely be brimming with bid orders from traders looking to pick up cheap coins. The 4 Hour chart above showcases the levels mentioned above and their relation to the current price of $469 per coin.