Bitcoin: Just a Pullback not a Crash!
According to my TradeStates algorithm, a near 1:1 copy of the commercially available TradeStops service by tradestops.com, today’s price drop in BTC, caused by the announcement of closing the BTCChina exchange, is not dramatic enough to sell your Bitcoins just yet.
For this plot the BTC price averaged across exchanges and hours of the (UTC) day is used, so today’s price for 14 September is not in yet. But the quickly drawn blue arrow at the right of the chart indicates the actual trading price 3549 USD/BTC at the time of writing (15:55 UTC), sitting comfortably in the orange band at quite some distance yet from the current stop level 3016 USD/BTC. (UPDATE: Trading price is 3350 USD/BTC at 19:51 UTC)
In the past we have seen that when price dips into the orange band it’s generally a good time to buy, because:
- the distance to the red stop line is relatively small so risk is limited,
- the dip does often not follow through to the stop and price reverses shortly after.
Three of such price-dip-reversal occurrences can be observed in this chart, at the purple arrows.
For details on the methods and explanation of the lines and bands in the chart, please see my other stories on Medium.
Disclaimer: This article was written for informational purposes only, and is not intended as personal investment advice. Practice due diligence before investing in any investment vehicle mentioned in this article. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it.