- Published: Friday, 23 May 2014 07:15
- Written by Editor
Please note: today's report will be shorter than usual. Thank you.
Bitcoin Reporter first reported a break in the medium term down trend over a week ago. We also reported that this would likely cause shorts to cover and go long and those sitting on the sidelines waiting for the trend to turn upwards to enter the market, causing a sharp spike upwards in the exchange rate. This is exactly what has taken place. The question now is, can this momentum continue?
Almost exactly a month ago the exchange rate was consolidating at around what we determined was current fair value of $500. This consolidation was progressing very well and had it continued would have concluded followed by the beginning of a new phase of the long term bull market.
Further news from China intervened in the that consolidation process and threw the exchange rate down $50 were it has been consolidating for the last couple of weeks.
Towards the end of the consolidation process, against a backdrop of contracting volatility and volume, the exchange rate also moved up through the medium down trend line, at which point we reported that the market was poised to break upwards in to a new phase of the long term bull market. We also reported that this move was likely to be explosive as shorts cover and go long and those sitting on the sidelines waiting for the trend to turn upwards bought in to the market.
As of today all of this has come to pass with the exchange rate trading $80 higher after peaking $100 higher in just a couple of days. So what next?
The market is currently overbought following the recent dramatic rally, and can be expected to enter in to a period of consolidation before moving higher at a more measured rate. The next phase of the long term bull market is however firmly in place.
The fundamentals are as solid as ever with each day providing more positive reasons to own Bitcoin. As we enter the next phase of the long term bull market, the market will increasingly respond positively to positive news and shrug off negative news in stark contrast to the last few months.
It is highly unlikely that any form of news unless extremely negative will shake the market now,
On the other hand the flow of positive news for Bitcoin can be expected to grow exponentially which will be reflected both financially and in the Bitcoin exchange rate.
Bitcoin Market Outlook
There seems little doubt that the medium term down trend has run its course and the next phase of the long term bull market commenced. While it may seem a little early to suggest this, there is really nothing on the horizon that could dampen the new bullish sentiment which is completely justified.
After a spectacular jump of nearly $100 in a couple of days the exchange rate is technically overbought and would likely to consolidate around $530 for a while before moving onwards and upwards at a steadier rate.