Hard to be bullish

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Heres a log chart with my March channel drawn in again. I said I’d be watching to see if we stay in that channel. Even though we are in it currently (just) we fell out the bottom recently, to me it doesn’t look like the channel is active anymore no matter how much I wanted it to be.

There is still the original channel I followed which looks like might have provided support at the bottom of the crash which I haven’t drawn in. Will watch closely what happens if we test the bottom of that channel again.

The 200 day moving average looks very interesting, here it is on a 3 month chart.

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The 200 day moving average has provided support several times during the bull run. Look now, we are under it. Also it looks like it may now be resistance. This doesn’t seem to provide much of a bullish outlook.

Although I am a long term bitcoin bull, and that certainly hasn’t changed with this latest bubble. Its getting very hard to stay bullish in the near term. Although it pains me to say it I might have to become bearish for a while. This bull run might have been nipped in the bud by creation of some kind of fake top, as I’ve postulated elsewhere. Or perhaps it was just a normal speculative bubble.

In the end bitcoins still have the same strong fundamentals as always. None of the reasons for trusting them or believing in them have changed. Their spectaular rise may yet have several more speculative bubbles waiting in the future, on the way to them attaining their full potential.

 

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4 thoughts on “Hard to be bullish

  1. Thanks for this analysis.
    It confirms my suspicion that the trend has changed, short-term at least, and that we are now in a consolidation phase.

    Like in June/July of 2011, there was a manic runup, followed by a dramatic correction, and then a long period of consolidation.

    I just withdrew my offer at $157 and will now sell most of my stash at $100. DCA be damned, it’s gonna be a long wait for it to get back to $157.

    • Its hard to argue against the trend change at the moment. I’m not 100% sure yet but I’ve sold some btc few myself just now on that assumption. Not seeing any obvious new channels yet, might take a while before they become apparent. Those uptrends were so nice to follow. Won’t be the same if I have to draw down slopes next.

  2. Moved 10 BTC over to the btc-e exchange and practicing trading back and forth between alternative currencies. The rest actually sold at about 99 or 100, and I took the money out of MtGox and back into Dwolla. So I have most of my $$’s back, and some BTC to play with. One or two BTC and less than $100 left in MtGox. Spending the $$’s on silver this week.

    I consider the whole thing as an exercise in trading, and not really a long term investment. Currently much of it is in Litecoins, which are on an up escalator at this moment. To tell the truth, I don’t have a lot of expectation for any of this stuff. I’m not going to go around shouting ‘Ponzi!’ like so many poorly informed commentators, but I think we are about to get caught up in a currency war among the Euro, Yen, Sterling, BRIC-s and POSX and that will be such a distraction that BTC is largely irrelevant. If there’s an internet left after the dust settles, then there might be a place for such a currency but I think BTC is really only a prototype. For one thing, the size of the blockchain is already getting unwieldy.

    • Nice tip off, I’m not familiar with that exchange but will check it out. Been wondering wether to start looking at litecoins in a bit more detail. Some people say it is the silver to bitcoins gold. Might be a nice way to swap out of btc without going back into fiat.

      I’m open minded about the future of bitcoin, it has massive potential, but at the moment carries too much risk for me to put my life savings in it. I think the blockchain can be managed, clients will move away from processing it themselves though.

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