Bitcoin adheres to Technicals on BTC-e but gets a pounding on MTGox

Right now on BTC/USD via BTC-e we’re seeing some wayward movement. Let’s take a closer look on what’s happening right

Right now on BTC/USD via BTC-e we’re seeing some wayward movement. Let’s take a closer look on what’s happening right now on BTC-e by way of an intra-day chart below. (Click to expand).

btcusdm30_14_02_2013

Join the iFX EXPO Asia and discover your gateway to the Asian Markets

First thing you’ll notice is that price has been steadily falling down this morning, crashing way below the lower Bollinger line, hitting a low of approximately 515. The technicals on the next candle however, told us that a retrace was possibly about to happen.

1. The Accelerator Oscillator was below the middle line and closed as bullish.
2. The Stochastics had crossed upwards whilst being underbought.

Price rose until it touched the middle bollinger line at 583, before testing the same middle Bollinger line (a natural trendline) for the next 5 hours without breaking it, until the candle marked with a blue arrow.

Suggested articles

UTIP Platform Now Supporting Chinese QuotesGo to article >>

Yet after multiple attempts, you can see how this finally closed ABOVE the middle Bollinger line (marked with a blue arrow). Many people aren’t aware of the support and resistance the middle Bollinger line can provide, but it’s a very key indicator.

Unsurprisingly then, price did continue to rise on the next candle, in fact rising and closing above the upper Bollinger line, then touching the 61.8% Fibonacci retracement level, before coming down to the 38.2% Fib level.

Right now price is hovering around the 50% Fib level and I anticipate it will stay between 38.2% and 61.8% for the remainder of the day.

However, it’s important to note that what I’ve mentioned here only applies to BTC-e. What we’re seeing on MTGox is a different story…

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

Got a news tip? Let Us Know