Longer view

This is a chart interesting me at the moment, BTC-E on log price scale

Chart shows the April 2013 mini bubble and then the main big bubble which we still deflating from. I’m looking for support just below $200 if we fall that far on green trendline.

Although bitcoin is still well within the down trending channel stretching down from the all time high or even despite the channel we are entrenched in I can’t shake the feeling that we are near the bottom of this correction/ bubble popping.

As I’ve mentioned in just about all my recent bitcoin posts I view prices at these levels as cheap and personally think of these prices as an ‘accumulation zone’. I could be wrong, but my money is where my mouth is and I’ve added to my own stack.

Nowadays bitcoin has scaled up and become more than just ‘mt gox’ and things are taking longer now than in earlier days of bitcoin. There is a huge amount of negative sentiment to get past though and this bubble is taking longer to correct than the massive bubble of 2011 for example.

Other things have changed too, bitcoin now has derivatives and although I don’t personally use an exchange where I can short bitcoin, it is possible. In this bubble correction that has been very profitable for many speculators possibly. I wonder if speculators shorting bitcoin is the cause of bitcoin being driven below what I referred to as the long term channel. And certainly more depressed prices than we were used to in the ‘old days’.

With that in mind heres a look at my ‘all time’ chart which combines data with the failed MtGox exchange from earliest days of bitcoin.

Long term channel referred to above was the lines shown in solid green. If bitcoin is to spring back into or above that long term channel at any point it will already require new all time high price. Although bitcoin can fall further or even to zero it does have an oversold look about it. Note the bullish divergence I’ve indicated using blue lines which on momentum indicator slope up. When a real bull phase does get going shorts covering may add even more fuel to the rocket.

How far down?

With Bitcoin experiencing further drops are we heading back to test ‘the bottom’! ie the area around the lower green trendline on the below chart. Heres a look at todays 1 day chart from btc-e.

Bitcoin has not held the lower purple dashed line but instead looks to be following red bearish lines down, quite steeply in fact. How far down might it be heading? will it get down to that green trendline somewhere around $176 ?

If I switch to log price scale there does look like an area of support before reaching those levels though, heres 1 day btc-e but on log scale this time.

The bullish channel I mentioned in my last bitcoin post didn’t last very long, neither the area of horizontal support. However red trendline which is mid point of large bear channel may provide some support plus round number $200 is where I’m thinking might be next support if price drops further.

Below that there is green trendline on top linear price chart at $176. From bullish point of view I don’t want to see that support fail.

Dash

Having been burned by experiences with alt-coins in last year, first with Cloakcoin’s major disappointment as its exchange rate fell towards zero, then mintpal exchange disappearing along with my remaining alt-coin funds I’m bit wary of going near or discussing alt-coins again. But having said all that here I go again afterall..

Darkcoin is back on my radar. Except now its called Dash .. standing for Digital Cash I believe. The rebranding does look like a smart move to me by distancing themselves a bit from any negative perception of the ‘dark web’. Anyway other things have moved on too in Dash, since I last spoke about darkcoin as it was then the darksend feature is now all completely open source code. Darksend being closed source is one of the major things I didn’t like initially as you may recall if you follow my blog.

A bit older and wiser since my first forays into alt-coin I now think the risk of going into first pump of new coins full of promise is just too much risk for me. Dash however is now one of the established coins and the focus on privacy is a big draw for me.

Anyway, heres a look at some Dash charts from the Cryptsy exchange. Will start with looking at all data on log price scale. Here it is priced in bitcoin.

20150408Dash2

Here you can see darkcoin started with a massive bubble peak which has then spent several months deflating from. However more recently there is renewed buying and dash almost reached the level of that first peak just falling short. The latest bull run has been punctuated with two mini-bubbles the second of which dash is still falling from. I’m wondering if 0.0135 where the price hits my trendline may turn out to be a good entry to Dash as it gains again for another leg up ? In my typical impatient fashion I’m already in, in fact.

Another thing I’m wondering about is the kind of rounded bottom of this chart, are we looking at a large cup and handle formation?

Anyway heres another closer look at the recent moves up.

20150408Dash

Not much to add except note the huge volatility. Investing in alts is definately not for everybody. But personally I like Dash and also like the look of the chart.

As always please note this isn’t trading advice just a sharing of my own ideas which sometimes work out and sometimes don’t . I am far from being a financial expert.

Quick bitcoin update

Heres quick update for bitcoin, first looking on 4 hour chart.

After the pullback of a previous post we are still sitting under that channel I was watching, marked in purple dashed lines. Bitcoin couldn’t rise back into that channel the other day finding that the line which was support has become resistance. However it looks like there is evidence of support from a lower parallel trendline which is quite nice to see. Bullish trendlines. Doesnt’ look like there is upwards momentum for much of a bullrun yet though. We’ll see how long price can find support on that trendline. Might not be that long.

On log price scale, latest chart looks like this

From a quick glance overall trend is still bearish you’d have to say. I had hoped to see more support from line I marked in green which hasn’t really materialised with bitcoin now under that. I wonder if bitcoin may take another dip, can quite easily see it falling to $230 where there might be some horizontal support I’ve marked, possibly even as far as down to $200 where that red trendline is although I wouldn’t really count on it getting down that far..

For now I consider most likely price will consolidate roughly horizontally with some rises and falls along the way.

edit: Just been looking at this thread in the forums https://bitcointalk.org/index.php?topic=1013481 Credit to the poster Wary theres a channel I hadn’t really spotted yet which I can add into the log chart, something like this

Waiting for bitcoin to unfold

To be honest I haven’t been posting for a while because my recent ideas haven’t changed much. I still think its ‘possible’ we saw the bottom already, with prices as low as this I’m considering this is the start of an accumulation zone for longer term holding. If I’m honest we are still in a downtrend. Also I’m not ‘all in’ but its an idea I am taking seriously myself and have been adding to my stack for first time in months. This isn’t trading advice for anyone, just sharing of my opinions.

I am due some updates to my charts though so here goes. The pullback predicted in my last post happened almost exactly as I thought, which is nice when that happens. Heres a look how that head and shoulders played out on btc-e 4 hour chart.

Price fell almost as soon as I clicked post I think. Also the initial bounce was almost exactly on the bottom dashed purple line of the original chart where I expected. After which price has fell through what was my bottom line, now lying under that channel I had been looking at. Although I’d like to have seen bitcoin stay within my purple channel I’m not too concerened to see it fall through the bottom.

Heres a look at zoomed out view on 1 week candles.

I’ve examined this idea before but here again, why I think we might have already seen the bottom. Lower green trendline has also been hit by other significant lows including low point of the mini bubble correction and silk road panic sell off. Just looking at the drop from the peak its getting hard to see how much lower it can go without bitcoin collapsing entirely. Also on this view the bearish trendlines have been broken through a few times now with price looking to be leveling off a bit.

However before getting too carried away, for a different perspective, on the log chart we see downtrend still rules the roost.

On log price scale we are still well below powerful line of resistance. Recent bull run fell short of even testing it.

I guess like everyone else I’m just waiting to see how it all unfolds but cautiously optimistic the tide is turning

Exciting

Bitcoin surging up at the moment, in a quite exciting way actually, soon to push up past $300 by look of it. I’d had almost forgotten what a bull run feels like. Since I started posting about green shoots a while back its starting to feel like winds of change are in the air. (Not to tempt fate the big grizzley bear too much I hope)

Heres update to my last post in which I expected a correction which didn’t happen, btc-e with 4 hour candles this time.

Bitcoin busted up through the latest upper red line which had previously repelled it twice, then pushed up through the purple dotted line where again I thought there might be more resistance. On this chart you also see several victories for bulls over lower red trend lines in the past.

Could there ‘may’ be some resistance, at about $312 where I put a red dashed section over my green trendline. 312$ is a prediction I made recently after looking at gold / btc ratio but really was being a bit cheeky trying to predict an exact figure like that. However..

Looking at log price scale chart of btc-e a quick glance shows where I expect the real battle to lie a little higher than that.

The down trend is very obvious on here, if bitcoin keeps surging up at similar rate it will encounter that tough upper resistance line at about $340. Imagine if bitcoin breaks bullishly above that channel then I’d be seriously thinking of getting onboard before the ship sails. Otherwise price may fall back to ‘the accumulation zone’ with more time to perhaps acquire some more cheaper bitcoin at your lesuire. I personally don’t think there will be a new lower low though.

I’ll finish this post with another look at my ‘all time log chart’, showing bitcoin from days of MtGox (hollow candles) all the way up to now using btce for recent bitcoin data.

The little bit at the end shows a nice collection of green candles reminiscent of the early stages of some big runs in the past. I’m checking regularly to see if the trendlines are still being obeyed after the failure of the long term channel, I think they are, but jury still out I suppose.

Pullback looks likely

Heres btc-e on 1 hour chart

Since beginning of March price has followed a trendline sloping up quite steeply, shown in green dotted line. However bitcoin has now fallen through that line. Also looks like rally since the low has reached top of what looks a bit like a rising channel shown pink dashed lines. Wouldn’t be suprised at all to see bitcoin fall towards that lower pink dashed line which may provide nice buying opp if you are thinking of starting accumulating some bitcoin.

The bottom turned upside down

I recently posted Was that the bottom?, an idea I have also discussed in the forums. Since then most of my bitcoin posting has been cautiously entertaining that idea further.

Recently I have come accross another perspective which supports this idea in quite a nice way I hadn’t thought of. Credit to ‘lowstrife’ on TradingView website for this idea. https://www.tradingview.com/v/ktWNOrLB/#tc146808

The idea is to turn the chart upside down and look at the bottom as a top. Like this.

This looks like the classic bubble top, is it a bubble bottom ?

Gold and Silver

Been a little since I looked at Gold and Silver on my blog, about time I had another look.

Will start with gold, as usual I am focusing on long term charts here, each candle is 1 week and chart stretches back to 2010.

Gold

Since the all time high in 2011 (nominally at least) gold has faced a bear trend. A large bearish channel has formed which is shown in dashed lines. On that channel gold has recently failed to break up into top half of channel and price fallen again. For a great many traders who aren’t interested in fundamentals this is green light to short the shit out of gold for surely it will keep falling.

There is another way of looking at the chart though. I drew in pitchfork some time ago maked in bullish green trendlines, (and never published it on my blog until now as I didn’t want to give the kiss of death.) If this pitchfork continues to prove valid I expect a rally from here and another attempt at that dashed middle line of the bear channel, maybe successful this time.

Further evidence can be seen by the bullish divergence in momentum. Despite lower lows in price the momentum is fading. This would support idea that gold is ready to turn bullish.

Silver

In very similar fashion silver can also have a fork drawn in using almost the same points in time to form the pitchfork. At the moment silver appears to be finding support on a parallel line slightly up from the bottom of the pitchfork.

Also just like in gold the momentum appears to show a pronounced bullish divergence.

Like holding a balloon deeper underwater only makes it want to pop higher up to the surface I feel the same thing may happen to precious metals eventually. Unless another countries gold is stolen (like Ukraine and Libya, not to mention all the gold which has been leased then remelted and sent east) then the suppression cannot last indefinatley no matter how many paper games are played in the Comex.

Gold / Silver Ratio

To finish heres a look at the ratio between gold and silver. This particular chart is on a very long timescale going back to the early 1990’s, each candle is 1 month.

Here we can see that there seems to be a large channel forming the trading range. When the ratio is near the top that is when silver is very cheap compared to gold. At the moment the ratio is near the top of that channel with a ratio something like 1 ounce of gold is same as 74 ounce of silver!!! Considering natural scarcity of the metals in the earth the ratio should be a lot lower. I’m expecting that the next rally of precious metals will see both silver and gold rising drastically compared to bits of paper with masonic symbols on them, ie US dollars but silver will do so quicker and more violently causing this ratio to drop again. As marked on my chart bottom of this range would be somewhere around 27 or 28.