The Bitcoin uptrend has been truly amazing to behold, but the technicals are flashing warning signs all over the place. Today’s daily candle is looking like it is going to close as a very large ‘Pin’. When bitcoin was trading at $220 in August, a very similar candle formation signaled that the market was oversold and that a reversal was on the way. I wrote about that particular candle in my tech analysis article on the 25th of August. Is bitcoin in overbought territory today? Quite possibly! The market has not had any noticeable pull-backs since October began, so today’s Pin-Bar may very well be hinting at a bull market that has overextended itself.
However, the one caveat that I have is that this particular candle is situated above the massive $310 pivot zone. This pivot area has a history that goes all the way back to late 2014, when the market used this level as support on two occasions. In 2015, the $310 level acted as resistance on two occasion as well – once on the 26th of January and again on the 11th of July. Considering the extensive history of this pivot zone, this level may very well act as support now, since price is currently trading at $323.
Disclaimer: This is not trading/investment advice!
Chart Source: https://www.okcoin.com/market.do
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