Bitcoin Price Analysis 10/16/15: Sitting in Key Support Zone

The big price run up has been followed by a big decline into a key support area. In order to remain in bullish position price needs to remain above the $300-$315 area.  The daily chart below shows that the price is consolidating within a zone right above this key support level.  Something else to consider as well is all the overhead supply which has been created from the blow-off top and subsequent spiral down.  Some key resistance areas have been Identified but most of these are relatively minor with the really big one being the $400 area as the price ran up to $500 and promptly sold off leaving those 2 consecutive long wicks full of supply.  If price consolidates here, getting above $370 would make a retest of $400 likely.

The indicators have corrected extreme overbought conditions caused by that exhaustion move.  After sliding here they appear to be basing before the next move higher.  The price is sitting and has bounced off of the 50 day exponential moving average which is at $306 and remains firm support. 

The weekly chart provides a more bullish picture. The price was able to close above the $300 level on a weekly basis for the first time since December of 2014. This is bullish. All of the indicators remain at bullish levels on weekly basis and the price remains above its weekly EMA's. If the 50 week EMA can cross over the 100 week EMA that would further improve the bullish picture.

The price formed a blow off top after a parabolic surge and promptly corrected this condition all the way down to the key support level it sits at now. Consolidating in this zone and not falling below is what is necessary for the picture to remain bullish.  The first area of resistance now is $331, followed by some minor resistance until $370.  After the recent waterfall in price, and being able to hold above $300-$315 support zone on weekly basis remain cautiously bullish.