Bitcoin falls

My last post about bitcoin fears and doubts looks to be transpiring at the moment. Price is dropping, not quite spewing off a cliff but still not looking convincing either. I’m thinking it likely bitcoin will fall further yet. Maybe we’ll find good support just below or around $400..

Heres an updated bitstamp chart with 1 day candles on linear price scale.

After my last post I had drawn in a couple more parallel lines to the slope of my pitchfork. As you can see price has bounced almost exactly where I might have expected which was at about $440. Although that pitchfork I drew in originally hasn’t held at all it has been useful in predicting minor lines of support. The fact that these lines slope upwards does provide some optimism but I think prices have to correct further first. Bulls have to feel more pain before the bull really starts getting going again.

As a bit of an update to the log chart I posted in my last bitcoin post heres a new version of it, this time using TradingView and some of the nice charting tools that come with it.

In the past I’ve sometimes wondered if the last two bubbles in bitcoin were really one big bubble. To me it seems increasingly like that is indeed the case. Some longer term readers of my blog might remember the long term log channel I often posted about. Maybe this channel is an extension of that old favorite.. Is price going to drop back into this channel? The bottom of that channel looks to be about $161 these days, quite a steep correction from the all-time high!! Maybe we’ll find support instead at the top of that channel, which would be about $400.

What to do if bitcoin is poised for steep falls ? Run to the US dollar ? I guess that is indeed what most people will do. Or could you run to your favorite alt-coin instead ? I think at the moment altcoins are falling as people rush to liquidate first to bitcoins then to dollars. What if that trend breaks at some point and alt-coins benefit from a rush out of bitcoin. Could investors opt to stay and hide out in crypto world instead of a rush to fiat? Its an interesting thought.

If you are from the USA you have to declare all bitcoin transactions for tax purposes if I’m not mistaken. Maybe it will benefit some people to declare a loss and cash out to fiat. Or maybe it will benefit some to stay out from under the fiat radar. The system of control, under the watchfull gaze of the illuminate all seeing eye of Isis, printed in the money, hidden not particularly well throughout entertainment and media.

anyway I digress. Maybe for some it might turn out profitable to cash out of bitcoin to some other alt-coin which may be extrememly oversold at the moment ;-)

Incidentally, this is the second of two posts I’ve done today, don’t miss my Cloakcoin post below.

Cloakcoin spewed off a cliff

Heres my latest update on my favourite pick of the anoncoins, ie Cloak. If you’ve been wondering how Cloak has been getting on recently, well it has apparently spewed itself off a cliff. This following chart shows what being spewed off a cliff looks like! Data from MintPal exhange with 12 hour candles on log price scale.

For the past week Cloak has plummeted from near all-time highs to new all-time lows with the fall getting steeper and steeper and no apparent areas of support to be found anywhere. Incidentally ‘all-time’ isn’t very long in the world of Cloak, data only stretches back as far as June.

If you look closely you might see where I marked nice time to buy which was around the time I posted my last cloak post. I guess it was a nice time to buy if you only held for short term, if like me you are still ‘bag-holding’ then I can only offer my sympathy and hope you remembered not to invest what you can’t afford to lose. Personally I have been quietly buying more at these incredibly low prices, maybe I’m throwing good money after bad, or maybe I am an astute investor. Time will tell.

During the initial couple of days of the plunge I searched for reasons for the fall in price. But cloak apparently was falling on good news! The first version of anonymous transactions had just been released and seemed to be working. Also a mobile payment system ‘Cloakpal’ had been released also seemingly working well. The bitcoin forum thread prominantly featured a user called Bobsurplus who was organising pump n dump market manipulation in various alt-coins. If he was behind it or not I don’t know but it does look very much like Cloakcoin has been the victim of a huge pump n dump to me.

By the way I cannot vouch for the anonymous transactions implemetation. The wallet is closed source and an image was not released for my operating system. Just like with Darkcoin this is something I do not like however I suppose I can understand reasons for keeping closed source initially.

Anyway through all the rumours, and conspiracy theories it seems that there have been some real difficulties with the new anonymous transactions and for the moment have been recommended to switch that feature off by altering the config file. Perhaps this partly explains the fall in price too.

Lead developer, Alty (theDagger) has put an update on his twitter feed. The initial version of the code has been audited and some problems discovered, as already mentioned above. The team are working on this and still committed to developing a trustless, anonymous crypto coin, the holy grail.

http://cloaktalk.org/t/private-audit-cloakcoin-posa/243

Bitcoin fear and doubts

Apologies for not posting for a while.. perhaps I’m in Cloak shock. Cloak is having a total and utter wipeout! However thats a subject for perhaps my next post. This one will be a bitcoin post.

So bitcoin, heres how its looking on my chart.. As usual for my bitcoin posts, I’m using Bitstamp data. This chart has 1 day candles on it.

This chart shows the very familiar shape of most recent bubble and subsequent action on linear price scale, including all the usual dead cat bounces and stuff like that. Maybe you recall the fork I drew in last time, which arguably is looking fairly valid by now. The price managed to hold along the bottom of the fork for a while creeping upwards, but not at all convincingly I have to say, then fell through and is currently bouncing in an area I drew in parallel support somewhat below.

I have stated I expect a grind lower in bitcoin and I suppose this is fitting the picture I had in mind. I think we might have a bounce from here, but in general I think the grind lower is probably going to continue after any bounce. I can imagine prices grinding bulls into submission in fact.

I nearly wrote a bearish post recently entitled ‘Poised to drop’ then refrained, I was imagining big drops, not the small drop we’ve seen last few days. But still nagging bearish feelings remain. Maybe this is that post afterall… Anyway, my journey into looking at alt-coins has lead me to use bitcoin wisdom website more often than I used to. Maybe the more limited set of tools compared to trading view has made me look with a different perspective or perhaps the extremely volitile crypto alt-coin markets I’ve dabbled with lately have done it but anyway I came up with this chart, again bitstamp data this time on log scale.

The chart is quite self explanitory. There is a log trend and there is the huge bubble, with price still sitting overvalued above it. I am not giving any trading advice here just sharing some thoughts and emotion. Yes bitcoin is huge, I have been a big fan since it was less than $20 for a bitcoin. But are we still in a huge bubble like that chart implies? Or is it the natural shape of the adoption curce? and next stop is $4000? I’m sure I could come up with a bullish chart to show that. Lots of questions, no answers.

Cloakcoin

Cloakcoin

Although I have briefly mentioned Cloakcoin previously in my blog I feel it is high time for a more detailed post. At the start of July, I said “Cloak is another one which has caught my eye as potentially could be huge, unlike darkcoin and some others which use coinjoin transaction mixing technology, Cloak aims for a different method of anonymous transaction which may end up becoming completely decentralised”

Since I wrote that I only began to like Cloak more and more. Unlike my hasty assessment of Darkcoin, perhaps Cloak will be the real deal.

Heres a nice article from deepdotweb which explains some of Cloakcoins ambitious aims.

Quote:

Cloakcoin is a new coin ecosystem designed to replace deep web marketplaces and CoinJoin applications. Cloakcoin is superior to previous attempts at anonymity because it offers comprehensive, trustless decentralized anonymity to cryptocurrency users. The three-pronged Cloakcoin ecosystem includes anonymous transactions using Proof of Stake Anonymity (CloakSend 2.0), a secure wallet with a built-in currency exchange, and a decentralized marketplace.

Full article here cloakcoin promises holy grail cryptocurrency anonymity

When I first heard about built in marketplace I was slightly skeptical thinking it sounds a bit like an unnecessary frill, however on further reflection it could be a bit of a game changer. There is no single point to ‘attack’ unlike, for example, the silk road market.

Since my own mention of Cloakcoin, here, it has proceeded to quadruple in value relative to bitcoin, rising from around 0.0003 to about 0.0015 where it stands now. (Which in a way I am spewing about as I haven’t followed my own advice and remained holding Darkcoin, which is still falling).

I was intending to post a chart showing Cloak on Mintpal using Bitcoin Wisdom website for the chart but encounterd a few difficulties so here instead is the link for the live chart.

https://bitcoinwisdom.com/markets/mintpal/cloakbtc

There is a lot I like about Cloakcoin, it appears to be very undervalued, flying under the radar so far. Unlike first mover Darkcoin, cloak has received little publicity. Although more scarce than darkcoin is still nearly 10x cheaper. But bear in mind these pearly drops of wisdom I have learned to my cost. As with all new alt-coins there is a LOT of volatility, the competition is fierce and many new coins have their moment being pumped only to then fade away. Having said that Cloakcoin looks very promising and I dont see much risk in getting hold of a few at these cheap prices then simply hold onto them long term. As with any risky investment, which goes for bitcoin too, only invest what you are willing to lose.

Edit:

Managed to upload the chart I referred to earlier, here with 12 hour candles

Bitcoin Drop Out – update

As an update to last post Bitcoin Drop Out, heres the latest view of the bitstamp chart, again showing 1 day candles.

The wedge I showed previously has now resolved downwards with price falling down to about $580. Now I’m looking for support around this price level which is quite a good test of my pitchfork hypothesis.

If the fork doesn’t hold, I would look for next support line at about $530 which I located with some parallel trendlines matching the slope of the pitchfork.

Lets see how it plays out

Bitcoin drop out

In the end it didn’t take long for bitcoin to drop below that pink trendline marking the bottom of large bullish channel. To me its looking increasingly likely that price volatility will remain subdued for a while yet, which is an idea I also portrayed in my last post.

Heres a look at Bitstamp with 1 day candles going back to the April low.

As mentioned, bitcoin has dropped below my lower pink trendline, which is now drawn as a dashed line.

I have now added a new inside pitchfork joining the most recent significant low with the last high. Perhaps this gives a new slope for my trendlines? In blue I have also marked wedge pattern which currently constrains price. Whether it breaks up or down I will be looking to see if support or resistance manifests on the trendlines of that fork. I have a feeling there will be quite strong support around the $600 level if price starts dropping.

Although the fork I’ve added slopes upwards keep in mind its just an early idea sketched in after failure of the pink channel, longer term I still think a grind downwards might be on the cards.

Testing trendlines

In last post I highlighted the lower pink trendline as key line to watch. Jury out but it looks like it was briefly broken but may have held afterall. Bitcoin is currently sitting back above that line.

Heres bitstamp with 4 hour candles

Zooming out to chart with 1 day candles showing last two bubbles gives another perspective on that pink channel. If the pink channel holds for a few months we would see steady gains but might not reach new all time highs until next year. Although when does bitcoin stay in any channel for a length of time, particularly in linear price scale?

Eyeballing the flat period after the last years April bubble I wonder if the pink channel is about to fail and we enter a gradual grind down. That last test was not really convincing although in the end won out. Will it pass the next test? Or might it end up looking a bit like the area I have sketched in after the last April peak with a question mark? If that comparison has any merit it could be quite a long boring flat period still in store for bitcoin.

However, for yet another perspective I have been playing with log chart again. As you probably know I did not like the way my beloved log channel failed, so my solution is simple, I made a new log channel!

This time I have defined the slope by the last two peaks rather than the points I previously used on bottom of troughs. Creating a channel this way gives a new bottom trendline which we are still sitting quite well above. If this situation plays out a bit like the arrows I drew in then the slow grind down after the pink channel fails might not last as long as feared.

In the end I could just as well scatter some tea leaves and try and interpret them, but drawing lines on charts is fun. My prognosis is that likely to see the pink channel fail, then enter a boring grind downwards. Eventually the patient may well be rewarded with spectacular moves up.