Bitcoin Market Update 8/27/2014
We've retested the breakout line of head and shoulders and broke above the upper channel. Market rapidly sold off to lower levels. To argue for the bull's case, we need to hold above 510 or 3150; creating sort of a cup and handle type pattern for the next push up.
While the push up is indeed strong, the movement unlike a real move is choppy this time. What I mean is this: a strong move generally starts out with some breakout along with large volume. On the hourly chart, you should see large green candles without much shadows accompanied with above average volume. However, the movement is up and we rallied 20 points, but the movement is not assertive like what I described.
I checked bfxdata, it seems like the long margin holders are actually selling into this rally, not accumulating. On the other hand, the short interest has dropped suggesting that the short sellers were covering while long holders are selling. It is hard to draw conclusion at this point until it unfolds, but it is something interesting to look at.
During this week of consolidation, I see sentiments on this forum changed from weary to full bull mode. My understanding of trends is that they don't change directions that often and certainly not likely to change when price hasn't even moved. I am still short from about a week ago at 512.