This is always an important question. From here, it’s looking like it could be a pretty steep fall.
Working off of the fact that we haven’t seen any news yet that precipitated this, it seems like our main methods of inquiry are historical resistance levels and current order book data.
Historically, we can see that (all numbers Bitstamp):
- It has bounced off 800 several times since the near-1k of early January; this is the first significant, real break
- Prior to the early-January bubble, the price hovered in the low 700s for a long time with relative stability.
- Not much else
What about the order book? Again, Stamp:
- ~2800 BTC to break under 700
- ~2100 BTC to break under 725
- ~1400 BTC to break under 750
- ~950 BTC to get to 750; 450 BTC wall @ 750
From this it seems we can make a reasonable set of predictions. First, it will be very difficult to break 750, but not so difficult to get there. In fact, we’re relatively likely to get near 750. If we do break 750, we’re likely to get pushed back up: 700 BTC/$25 price change is relatively strong, and people can look back and see 720-730 as a pretty reliable resistance level, which may convince them to buy there.
I’m watching the market a little longer before I go to bed for the night, but in all likelihood I’m setting a buy order to close out my short between 750 and 760. No idea if it will happen, that seems to depend on whether or not China is afraid today.
EDIT: On the topic of missed opportunities, my god, what the hell did Litecoin do to deserve this? Is this a reaction to the hash rate drop? To DOGE becoming a thing?
EDIT2: I’m still awake, and China is showing no signs of stopping having just broken 4600 CNY or 760 USD. I think this is a night where I should stay awake, with how it’s looking. BTC-e has been leading Stamp 8-15, and Huobi has tended to be right behind BTC-e. Interestingly though, Huobi has been leading the whole time–when Huobi pauses or moves up, BTC-e follows it. BTC-e appears to basically be anticipating Huobi’s movement, which makes some sense given the trollbox.
EDIT3: This Stamp/BTC-e rally is pretty bizarre. Huobi has been down 12-15 from them for awhile. They didn’t get there on thin volume, but the price does appear to be propped up by .01bots on both exchanges.
EDIT4: Alright, bedtime. Set a buy for 758. The Stamp Wall makes it difficult to know if this is going to turn out well, but China seems to be slowly continuing a downtrend.