So this morning we saw a MASSIVE drop on Bitcoin. The reason? Trading Exhange Mt. Gox has just announced that Bitcoin withdrawals remain halted.
It was swimming along nicely in the early hours, ranging between 695 and 720 before crashing big time, easily halving it’s value (on BTC-e).
Yet despite the huge drop, there was still adherence to the tried and trusted technicals.
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Take a look at the hourly chart above. You’ll see how it smashed through the lower Bollinger Band, and when that happens – there’s usually a high probability that price will quickly retrace back in between the lower and middle Bollinger lines.
As we can see, this hasn’t quite happened yet. However, there was a clear bounce off the 50% Fibonacci line, virtually to the pip, and as of writing, price is hovering at the 61.8% level.
Right now the Accelerator Oscillator is still red, but should turn green within the next few hours, hence I anticipate price to rise further this afternoon reaching around 660.
Analysis provided by Ashton Fraser, learn more about his trading strategies at Forex Reversal.