Since piercing above $500 towards the end of May and continuing its rally to begin June, prices of bitcoin have twice hit resistance at $670 (upper green line). Following the greater than 50% move high in only two weeks, the indication of resistance is a natural occurrence and represents an area sellers are willing to cash in on their holdings. However, despite the indication of supply, demand has remained steady in bitcoins, twice holding above $600, with rallies occurring each time prices approached that level.
Today, further bullish trends took place as prices moved above a short triangle pattern that had been formed. The triangle was the result of short term resistance just above $640 and an uptrend from the $610 level (see chart). After hitting $640 several times on BTC-e, bitcoin prices were unable to continue their rally but demand appeared to be increasing as prices were hitting higher lows. The increase in demand became eventually led to a greater than $10 spike once the upper resistance of today’s triangle pattern was pierced.
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Heading out of the short term triangle, focus is now on the upper week long $670 resistance level and three month highs. Over the short term, the $640 level now becomes our new support base. However, falling back into the triangle would indicate that today’s momentum has dried up.