Following the high-profile DAO attack, markets have moved into panic mode with BTC-USD breaking below $725, the critical support level highlighted in our price analyses last week. Buyers were only able to extend to highs around $778 before momentum switched as investors began to question the extent of the influence of the attack on Bitcoin’s credibility. Since then, sellers have dominated. The price action has broken below both the $700 and $600 psychological support levels, with the current price at $582.54 on the BitStamp exchange, down 3.12 percent on today’s open.
The chart below illustrates the short-term outlook with the hourly price action for BTC-USD. The market is consolidating after posting a fresh low at $540.17, which is now an important fractal support level. The chart illustrates that sellers are in control as the price is below the Ichimoku cloud (red), and the base (dark-red) line is trending above the conversion (blue) line. Therefore, in the short-term we should look for opportunities to sell.
The market is currently looking to break the most recent fractal buy level at $574.64, shown on the chart below with the yellow ray. A break below this