BTC/USD Technical Analysis – 7th March 2014

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

With Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term taking a few breaths since the 5th of March, are we now going to see some more serious movements?

Lets take a look at the H4 chart on BTC/USD (click to expand):

I've done the Fibonacci study from the low of last week at 430 till the high of this week at 700. We've already discussed the reversal pattern that was observed prior to the retrace.

However, it wasn't much of a retrace, with price only going as far as the 23.6% Fib level at 635. In fact, the 23.6% level has been a very strong support level, with price testing it no less than 5 times (circled in blue).

Ideally, I'm waiting for a candle to close below the 23.6% level, which will represent a break of this support, in which case I expect movement to 38.2%, which also happens to be around 600, a psychological round number, which will very likely provide some further support.