The Bitcoin hit a new all-time high during the second half of the day. Bitcoin reached a price of 6,345 USD on the Bitfinex exchange.Buyers had been preparing an attack for the past two days, during which the price consolidated around 5,650 USD. After consolidating within a range of 238 USD, the price broke through the trend line at 5,935 USD, and then through the resistance zone from 6,020 to 6,055. By the end of the day, the price had reached the upper boundary of the U3 MA channel (average line with a period of 55 and a 9% upwards deviation).
After reaching this level, the price started to undergo a correction.There are rumours that bitcoin reaching a new all-time high could be related to the appearance of a new cryptocurrency exchange in China; ZB.com. It’s as of yet unavailable, with trading set to start on the 1st
of November. The twittershpere suggests that the Chinese government may be behind this new exchange, allowing its people to trade legally on the new platform once other exchanges close on the 31st
of October. Heretofore operational exchanges OKCoin, Huobi, and BTCC, have yet to publish anything on their sites with regards to closing their exchanges.On the daily timeframe, a diagonal triangle with three subsequent higher highs is forming beneath the R1 resistance.
This has resulted in a double bearish divergence between the price and the AO indicator. The price is showing two rising tops (2 and 3), while below on the AO there are two corresponding lower highs.A double divergence is a strong signal. If this growth was down to rumours, we could see profit-taking on long positions at any moment. Bitcoin likes to be plotted in successive peaks of 3 or 4. If we see this type of pricing model followed by a sharp drop, the price should fall to the first base in this model. In our case, this level is at 5,114 USD.If this pricing model doesn’t work out, there will be a long flat. In any case, the rally’s end will be the driver for any subsequent movements. See for yourself, to bring the price of bitcoin up by 5% on the Bitfinex exchange, 4,766 BTC needs to be purchased in the order book, or 29.5m USD added to it at an exchange rate of 6,204 USD. To bring the price down by 5%, 3,774 bitcoins need to be sold. There’s significant buying and selling volume at the moment. For the support or resistance levels to be broken, we need these volumes to get depleted (i.e. for people to cancel their limit orders).