Bitcoin Outlook- July 13, 2014

By DailyForex | Updated July 30, 2014 AAA

BTC/USD has broken down below the important support level of 620 and as mentioned in yesterday’s Bitcoin Analysis, intense selling was witnessed and our target of 550-560 has been achieved. The level of 620 now becomes a major hurdle to cross, as a lot of positive sentiment has been punctured.

BTC/USD, which has had a dream rally from levels of 440, from 19th May to 680 on 1st June, is now trading near its important support region of 540-550, which is between the Fibonacci retracements of 61.8% and 50% of the entire rally. A significant close below the 61.8% retracement level of 537 could further intensify selling and the prices of as low as 450-levels may be witnessed.

Risky traders can start buying the pair at current levels or they may do so at 540, keeping a strict stop-loss at around 535 for a target of 600. Fresh short positions may be created only upon a significant close below 535 for targets of 450 and a stop-loss of 560. Less risky traders must wait for the selling pressure to weaken, and buy only after signs of buying emerge.

News to know:

The latest development on the Bitcoin front comes from US government which is planning to auction 30,000 Bitcoins (approximate number), valued at a massive $17.4 million on 27th June. As soon as the news broke out, the price of BTC/USD immediately sold off and the price plummeted 10% to below 620-levels.

Nine blocks of 3,000 BTC and one block of 2,657 Bitcoins will be put on auction on the US Marshals Service website over a 12-hour window. The nine blocks and the single block will be referred to as “Series A” blocks and “Series B” blocks respectively.

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