Bitcoin (BTC) prices have taken a breather over the last 10 days, trading within a relatively tight band between $620 and $660 on BTC-e.
BTC is currently trading at $640. Volume has visibly tapered off in proportion to the slower pace of price change. During the rally, volume averaged 600-800 BTC/hour but has since dropped to 100-200.
This represents the longest stretch of flat activity during the 3 week rise. As such, we’ve reached a key juncture in BTC price: is the current lull merely a foundation for the next jump to breach its 3-month resistance level and advance back into the $700’s? Or have we formed the top of a hill inevitably destined for correction to test $600?
FXPRIMUS Celebrates 10-Year Anniversary with a Grand Gala in Kuala LumpurGo to article >>
A cursory look at the mid-range chart is inconclusive. Indeed, such lulls in the past have been followed by major movements in either direction.
While it would be tempting to assume that BTC will once again retrace up to 50% followed by another advance, as it had done during the first three legs of this rally, we’ve previously pointed out that the latest leg signals a marked deviation from this pattern.
Looking at the long-term picture, of note is BTC’s catching up with its 200-day moving average, an indicator which Pantera Capital believes is highly bullish based on historical price trends. This level is currently around $640, which was breached during the start of the latest leg. Interestingly, this is the very level at which BTC has been trading during the 10-day lull, +/- 3%.
BTC had not crossed above its 200-day moving average since late March.