BTC/USD Technical Analysis – 9th April 2014

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 is sticking like glue to a key Fibonacci level, as the market reaches a period of consolidation, with the trading range getting narrower as time passes. Indeed, what we’re seeing playing out this morning on Bitcoin is a typical Bollinger Band “Squeeze”.

Let's take a closer look at the current BTC/USD chart on the H4 timeframe (click to expand):

I've performed the Fibonacci study from the high at the end of March at 589, until the month's low at 410.

What we need to focus on is the latest dozen or so candles and their price action. Look at how their bodies have been getting smaller, resulting in the Bollinger Bands getting tighter. According to the founder of these Bands, John Bollinger - the periods of low Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term are often followed by periods of high volatility. Therefore, a volatility contraction or narrowing of the bands can foreshadow a significant move up or move down.

And of course we have the 23.6% Fibonacci retracement level acting as a resistance level. Even though we have other technicals telling us there could be a break of this level soon, the fact that we have a squeeze in place right now leads me to hold we could see the resistance continue for some time yet.