FreedomPhilosophy Posted July 26, 2014 Posted July 26, 2014 Here's my analysis of the bitcoin summer market. An analysis of the Bitcoin market post MtGox! Dramatic declines in Bitcoin price towards the end of December left some pundits calling a bubble in Bitcoin. However a few weeks later in early January, after reviewing the situation it was clear that the bubble did not pop. Bubbles tend to occur when non-professional investors attempt to trade on gossip causing a dramatic price increase that attracts more greedy investors to join later to catch some of the action. Once the high is reached everyone sells off to try and take profit and prices return to their original levels. A money market like Bitcoin was a poor candidate for a price bubble and as I explained, the price range established mid November offered support to what appeared to be a crash. The failure of MtGox did not shake the other exchanges and although prices continued to decline in a down-trend on lowering volumes, prior lows probed more deeply but held and then the down-trend broke after consolidation mid May followed by recovery. Summer brings a return of confidence in the market with consolidation around $450 in May and $550 to $670 area in June-July. Conclusions Overall a bullish outlook but still with concern from the lower low swing down to $350 in April. Opportunities to trade short if $550 breaks to test below $350 or if $670 area breaks, then up to $850 and perhaps probe the highs again at around $1150.. The above information and the associated program are purely intended for educational purposes, they are not intended as advice or a solicitation to trade. Interested in more regular Bitcoin updates? Then please let me know. Errata: At 8:08 I describe the bottom at $670 instead of $570 (dark blue line in B region). Donate http://freedomphilosophy.tv/donate/
J. D. Stembal Posted July 26, 2014 Posted July 26, 2014 I am kicking myself a little bit for not buying in mid-May when I was on the fence about it. I keep tossing USD$100 at it every time it dips, I never really understood the bubble psychology explanation to bubbles. I'm not saying it doesn't exist, but I don't think it is the sole determining factor to formation of investment bubbles. Much of it has to do with the nature of fiat currencies. People are so keenly aware that if they sit in cash for too long, their money will lose purchasing power, so they're willing to throw it at just about any investment opportunity that comes along, including alternative and speculative currencies. For certain, there is an effect of psychological behavior on investment, expressed as a mean, but the bubbles of the last century are ripples caused by the Federal Reserve's central banking system first and foremost. Never forget that he who pays the piper, names the tune. What will happen to BTC prices when interest rates start bounding up, I wonder? I'm not claiming to have a crystal ball, but I am genuinely curious about the topic. How much purchasing power will the Bit Coin have in 5, 10, 15 years? How will it compare to the five precious metals, and other durable commodities? I also have never been keen to put a lot of stock into technical analyses. Here we are, almost August, and BTC in under $600 again. Not that I'm complaining, but what predictions or news hype is behind your confidence in seeing $1150 again - soon?
ebznflows Posted July 28, 2014 Posted July 28, 2014 I was driving myself crazy waiting for a time to buy. I eventually pulled the plug and decided to dollar cost average it by buying the same USD amount each month.
FreedomPhilosophy Posted August 6, 2014 Author Posted August 6, 2014 I also have never been keen to put a lot of stock into technical analyses. Here we are, almost August, and BTC in under $600 again. Not that I'm complaining, but what predictions or news hype is behind your confidence in seeing $1150 again - soon? At no point in my latest presentation or associated summary text do I express confidence in a price of $1150 soon, I'm less bullish now than 6 months ago. Instead I have given 2 trading scenarios should the market break above or below the current area of consolidation.Recently the market has been testing the $570 support again and it looks like it may hold up.
J. D. Stembal Posted August 8, 2014 Posted August 8, 2014 Thanks for the follow up. I've been buying when it dives into the 570 range. However, I also bought some at around 635. I wish there was a means for me to put in a limit order at a specific price automatically. I've been using Coinbase to purchase all of my BTC.
J. D. Stembal Posted August 18, 2014 Posted August 18, 2014 Welp, we've had a hiccup. BTC fell to $309 today. http://ftalphaville.ft.com/2014/08/18/1934242/a-bitcoin-flash-crash/
FreedomPhilosophy Posted August 23, 2014 Author Posted August 23, 2014 Welp, we've had a hiccup. BTC fell to $309 today. http://ftalphaville.ft.com/2014/08/18/1934242/a-bitcoin-flash-crash/ Yeah, as I suggested anything below $350 was an exit short (or buy) opportunity. I think that was a pretty good call.
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