Since the beginning of August a very powerful uptrend has formed in the BTC/USD pair. Positive news has attracted lots of new money to the market. The popularity dynamics of Bitcoin search inquiries is beating all records. All of this has impacted the exchange rate in a very positive way.
If we turn to tech analysis, here is what’s going on:
$3900 support zone; the price has quickly bounced off this level several times.
$4400 resistance zone; it does not look very strong, since there’s been no clear retest.
The uptrend continues, there have been no signals for reversal.
There are no signals for selling, and most likely the rally will continue. However, in the current situation one should be very cautious, especially if you are a short-term trader. The $4400 resistance zone is an important point. If $4400 turns out to be a strong level, then a $3900 correction is possible. $3900 is a good level for buys.
If the price goes above $4400 without resistance, it will mean that the resistance zone was not very strong. Here, it’s important to watch the volumes and order books on major exchanges. It is highly probable that a strong resistance level will occur just above $4400, and a reversal will take place from there. So the $4400 level break buys might not be a good idea, since this level has not shown much strength. Vice versa, if $4400 turns out to be a strong level, then level-break buys are good to go.
For short term speculators, the best recommendation, for now, is out of the market.
The best strategy for the coming week is correction buys from strong support levels.