Bull moves in bitcoin

The bear trending resistance looks to finally be falling as bitcoin is up again today, over 10% rise on Bitstamp at time of writing. Have investors realised China not quite banning bitcoin yet again is not that big a deal actually? Or maybe this time theres good news I’ve not yet heard. I’m not saying this is big news but I noticed today that no-ip is now accepting bitcoin https://www.noip.com/bitcoin/ :)

Anyway heres my familiar bitstamp chart showing the last bubble and decline with 1 day candles.

In fact in the time since I opened this post bitcoin is still rising, having broken through red line is now closing in towards my horizontal support turned resistance line. That would look pretty bullish if it could get over that.

Readers of my blog will know I bought back into bitcoin early, however I’m not too concerned as I have no need to sell. Recently I posted I think there could be new all time highs by end of July this year, crystal ball . I now think that is unlikely given that the log channel I was interested in didn’t hold. But I still think new highs later this year is easily possible.

Here is another look at a log chart I shared recently. At the time I said ignore the fork I’ve placed on it because I’m usually overly bullish

Despite the fact I’m trying to ignore that fork. Look where the bottom hit! Exactly on that lowest trendline of the fork. Co-incidence probably but it did make me smile to see it.

Hope you didn’t sell at $400, happy trading.

The bottom in silver

While I wait for bitcoins to load up on some more rocket fuel here’s a diversion into silver (Adam you should enjoy this one!). Silver is of course another monetary investment which can protect wealth and is well overdue a trip to da moon.

Silver which literally means money in several languages around the world still has plenty of moneyness in my book. Many prefer to call it an industrial commodity. Each to their own I guess. It’s precious and makes nice cutlery too. However if you live in UK and/or Europe you get taxed for buying this money! How can that be? Could it be that ‘the powers that be’ don’t want you owning real money? Is silver the Achilles heel of the matrix ?

Silver is in a downtrend since its 2011 peak, as I posted recently the similarity to bitcoin is striking except in this case the timescale lasts years not months.

Silver is very close to busting out of a resistance line which has halted it several times at higher price levels. However it also appears to have rock solid horizontal support at these levels. Its very hard to imagine silver falling below that horizontal support. I think it is going to bust through that red resistance line soon and then go on a bull run.

Therefore I call the bottom, we are long overdue for some up moves in silver I say. Here’s another look at silver, this time a log chart stretching back to the beginning of its bull run in 2002.

The log view really shows a different perspective, the large peaks and steep corrections are revealed to be highs and lows on a fairly obvious upwards trend. Red center line shows where I think that trend lies. The rest of the lines are all on same slope. I’ve added a fork at the top. Its early days for that fork however it could be that it holds and price runs up, perhaps towards that green line by end of the year, which would be prices of over $30.

I realise this may seem glacial slow for people who frequent this blog and are into bitcoin. My dream is that if enough people profit and get rich from crypto and then proceed to diversify into silver then we may start to see real changes for the better. The fiat ponzi we live with at the moment is a system evolved and designed to steal wealth from productive people, sooner it is replaced with real money the better.

Testing times

Bitcoin price has continued falling and is down over 10% today, sitting just under $400 on Bitstamp. Heres my latest Bitstamp chart with 1 day candles showing how it looks.

I wonder if todays big move down is fuelled by speculators who see the 50 day moving average falling below the 200 day moving average? Or maybe there is some bad bitcoin news I haven’t heard yet. Anyway, we are actually sitting below my 3rd level of horizontal support which I identified some time ago. One can argue the support may be slightly under that where I’ve added another thin dotted line.. will it hold ? It is being tested right now.

If that level doesn’t hold, maybe the previous all time high of the April peak is next level.. hard to say. I haven’t marked them on the chart but some indicators I’ve looked at, eg bolinger bands and MACD look to be pointing to bitcoin being oversold at the moment. I think there is chance of this level holding but I wouldn’t like to quote any odds. Almost expecting some authorities somewhere to hit another exchange or something though to try and drive it down further.

As a diversion from bitcoin, I don’t often post about litecoins but I have been looking at litecoin charts a little recently heres a corresponding litecoin chart with 1 day candles

Litecoins appears to be more volatile, which considering the extreme volatility of bitcoin is quite something to behold. Today litecoin is down over 16%. Unlike bitcoin, litecoin appeared to break through its main resistance level originating from the price peak, however that hasn’t been enough to prevent bitcoin continuing to lead it down.

To delve a bit further into litecoin heres a chart showing the ratio of litecoin over bitcoin.

On this chart a the line moving higher shows that litecoin is rising in value relative to bitcoin and falling line shows litecoin losing value compared to bitcoin.

What leaps out on this chart is those two whopping green candles where litecoin suddenly spikes extremely high around the time of the April peak and the December peak. I’ve been considering doing a ratio swap of bitcoin into litecoin for a while now, and at some point probably will, but based on the way this looks to be trending litecoin will probably fall further for a while yet.

If you are long on bitcoin I’d say hang in there, for me the risk of selling is more than the risk of holding for longer term.

Spot the difference

Heres a familiar looking bitcoin chart showing price decline from last December’s peak all the way down to about $435 where we are now at time of writing.

Another large 10% drop is currently in progress! Note we are rapidly closing in on my 3rd support level at about $400. Perhaps some support will be found there… perhaps.

Meanwhile heres silver on the Comex showing price decline from April 2011 peak.

Silver is close to resolving a wedge its been in for quite some time.

While I’m at it, this is what gold is looking like.

Did you spot the difference? They look pretty similar, only real difference is bitcoin is compressed into a much smaller timeframe. No real point to this comparison but similarity is kind of interesting.

When is bitcoin going to go up.. I capitulate.

Falling bitcoin

With bitcoin price now down to about $450 on Bitstamp and currently sitting BELOW my log channel I’ve been looking at lately, perhaps is it time for another look at some charts. In todays post I’ll focus on the log view.

First heres that log chart I just mentioned, updated. Hopefully more or less accurately, I had to recreate it after tinkering about with it earlier. Chart is showing 1 week candles.

Just as I was a bit surprised by the way we dropped through $520 support level as I talked about in last post, I’m now surprised how easily have fallen through bottom of that log channel. Its annoying, I liked the hypothesis that the log channel support the price and form a bit of a bottom. My crystal ball said new highs by July!

If I take the bitstamp log chart and zoom out then vandalise it with some lines and channels and forks. I can make something that looks like this, again its a log chart with 1 week candles.

It shows all the bitstamp data which goes back as far as end of 2011 but not far enough to show the really big 2011 bubble unfortunately. I can’t get the MtGox data on TradingView anymore. Orwell was right. History being erased!!!

You’ll note I have another channel which is not so steep, on which I’ve very optimistically added a bullish fork to the top of it. Perhaps or probably its not wise to pay too much attention to that fork, I’ve an overenthusiastic bull at times.

From this perspective you may think of the April 2012 bubble as part of the same bubble which eventually reached over $1000 rather than two seperate bubbles. If price was to fall back down into that channel, (which I’m not sure but might correspond closely to the old ‘long term channel’ I used to look at), then the price would have fallen down to about $150. That would hurt.

More than once I’ve stated that I will be surprised if price falls below $400 but the way things are going now I’d probably be surprised if it doesn’t. Lots to ponder at the moment, primarily how far is this correction going to go? If I was sitting with fiat to spend I’d be quite happy to continue watching price fall. I’m not at all tempted to sell into this drop though. Will bring some further analysis later but for now I’m calling it a day.

Further falls in bitcoin

Thought I’d better write another post since I’ve been reminded its time for an update from Australia. The bear in bitcoins continues as price has fallen or you might say plummeted, below the area I expected quite strong support at about $520, support which obviously didn’t really materialise. Bitcoin dropped to about $460 or thereabouts then had a rebound but again wasn’t enough to get back through support turned into resistance.

Price as of time of writing is just under $500. Heres that familiar view of the price action on Bitstamp since the December peaks last year. Chart showing 1 day candles.

Have to say that chart looks pretty awful, hard to see much chance of further support until $400 based on how that chart looks. If it falls through there how low will it go? I still doubt it will go far below $400 myself. Which doesn’t for a moment mean it won’t. I’m not going to reprint my recent log chart here but you can find it on older posts for reasons why I think the end of the bear might be getting closer.

So what caused that steep drop through support? From what I gather it was a rumour about chinese authorities clamping down?! (Which turned out to have no substance) I thought we’d been through all that but apparently its still enough to scare bitcoin investors into panic selling.

Well I just had a look at my log chart anyway and found it interesting enough to post afterall. Intrestingly the recent price drop appears to have bounced right on the bottom trendline of my log chart. Heres a view of it showing what I mean.

Does this validate my bullish log channel hypothesis? I guess maybe. It could be co-incidence but worth paying attention to.

Before getting too excited I’ve also found this bearish fork which seems to fit the price in this bear trend quite neatly too.

For now I’ll be sitting on sidelines watching how this develops. Bullish or bearish? Its getting exciting, are doubts creeping in for those that just sold? Or are there still bears waiting to capitulate? Which way is it going to go?

Edit: Just had another observation about the recent price action. The rise in price fuelled by Ukraine crisis looks very similar to the corresponding drop on this chinese rumour.. Same big buyer now selling ? The Rothschilds starting to get in on the action !

Fallen through support

Just a quick one really to show updated chart from my last Crystal Ball post, as per usual looking at Bitstamp market price.

I have same lines of support and resistance shown as last time. Very clear that price is following that resistance trend downwards at the moment. In last day or so have fallen about 4% and below my first horizontal support which was just above $600.

Next horizontal support looks to me to be around $520 price level.

Nothing really changed from my previous analysis in which I stated about a month and half of further down trend is possible, which indeed seems to be the way its going just now. I still think new highs by July is possible but obviously can’t promise anything. This isn’t trading advice.

Thats all for now.