420 is an interesting spot. That was the low on 5/5, which was about a 62% retrace of the first push up off the 339 low on 4/10 up to 683. So we are retesting that here.

It was very telling that we couldn't put in a new high above 683 in July; instead we trended sideways until we broke the second pullback's low of 538. Bottom line, if we break 420, then I think we are heading to retest 340. I'm thinking the most likely scenario is to grind down to 260, which was the April 2013 high. A nice capitulation there would set the stage for a new (real) bull market--the last runup to 1100+ was solely driven by the Mt. Gox "hacker" bot debacle (very intersting articles floating around on this).

Another aspect of this decline is that while it has been fairly big today, there just isn't much volume. That's not a sign of a good bottom. We probably need a 50000+ volume day to see capitulation. If fear starts ramping up, we may see 340 in a couple high-volume days. If not, we may bounce here for a few weeks and then head lower. But this doesn't feel like a low yet.

Just FYI, I've traded S&P futures for years and have watched that market daily for 15+ years.

As an update, we did have some pretty good volume @ 275, which may be close enough to the 260 I was calling for (using a fat pencil). This sell wall is pretty interesting, so we'll have to see how that plays out. I think it's actually bullish--you WANT to see big selling at bottoms.

I am also watching a UTL on the log chart that goes all the way back to November 2011 where BTC was $2. This UTL currently sits at about $200. This is important IMO, and if broken, I won't be bullish.

Interesting times!