Lows offer buying Opportunity on Bitcoin. Watching closely.

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
The RSI is at lows as is the price. There appears to be resistance at these levels as reflected by the orange support line. This could represent a buying area with a stop just below the previous low around 11100. This area is also represented by the blue 55 day moving average.

However some warning signs are apparent. The RSI is low, but also bearish below 50, warning of potential further weakness. If support at 12000 is broken RSI could head below 30. This would become a safer place to purchase, or second purchase area if the initial buy is taken and stop activated (Watch money / risk management).

Similarly, if support is broken and price continues to move down passing the green MA (100 day) then even further weakness could threaten the rally. The significant area to watch would be the red MA at 200 days. This has not been broken for some time. Breaking this level could warn of the end of the rally and opportunities to shorten.

Currently the fundamentals of bitcoin also draw some concern. The transaction time and pending transactions indicate serious congestion. Coupled with a weak price suggests waiting for congestion to quieten down before buying.

Looking at the chart and fundamentals there is possibility that current weakness will endure, causing some sideways movement or even further dips. These should offer opportunities to buy at lower prices, however keeping a close eye on the transaction congestion to make sure it doesn't get worse, or heavy selling might catch on if critical levels are breached.
Jan 05
Comment: Bitcoin appears to be supported at these levels. Buying is recommended especially once price passes 16500 resistance, possibly with a stop at 14000, depending on your risk management. Profit targets at 20000 and above, or long term hold.
Jan 14
Comment: The transaction congestion is still present with an average of around 160000 pending transactions, though the confirmation time has dropped to more realistic levels. Very cautious buying could occur at these levels.
Jan 17
Comment: Lower support has been breached, My stance has changed from neutral to bearish. A lower low will now form and the up trend will have ended with potential for a down trend to start.
Jan 23
Comment: I've updated my analysis with cautious buying opportunities, see my latest chart:

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