Finally, an immediate-term bottom for Bitcoin

For the first time in nearly four months, Bitcoin has confirmed an immediate-term bottom. 

By closing two days higher in succession above its 15-day moving average on April 15, Bitcoin (basis BitStamp) has confirmed an immediate-term bottom per the rules of our technical trading discipline. 

As difficult as it is to fathom, this marks the only time in the year to date that Bitcoin has managed to close two days higher above the dominant immediate-term trend line.  The weakness in the virtual currency’s price has been persistent, and only now that a substantial number of “weak hands” have been washed out of the market will Bitcoin be able to establish an interim bottom.

Now that Bitcoin has been able to decisively break out above its 15-day trend line, we’ll need to watch for the final establishment of the low from earlier this month.  The inevitable pullback should ideally close above the pivotal low at the 360 level.  This would form a higher low and would give allow Bitcoin to establish a stronger base from which to launch a meaningful technical rally. 

Incidentally, the nearest overhead resistance benchmark for Bitcoin is the 575-600 area where the 200-day moving average intersects in the daily chart (see above).