Heres a look at the latest 1 month chart, pictured above. We are pushing hard against resistance at $30. This resistance is not unexpected as the market depth chart has been showing a wall of sellers waiting at $30 for some time.
Just beyond the $30 mark lies the prospect of new all time highs in bitcoins, beating the 2011 price peak at somewhere like $31.5 dollars. Bitcoins have already made a noteable landmark today in that the price of 1 bitcoin has caught up with the price for a 1 ounce silver coin.
So with the prospect of new highs in bitcoins, just for fun I thought I’d compare this situation with gold and silver confronting their own long standing respective peaks. In the case of these gold and silver charts the time axis is obviously extremely spaced out compared to bitcoins where we are only 1 year from old highs instead of multi-decades.
Above chart shows gold breaking out past its 1980 high in 2007. In this instance gold smashed through the previous high with no apparent resistance but later corrected back below the all time highs before once again pushing on to new highs. Could bitcoins do something a little similar to this..
Silver nearly made it to the old high in 2011 but then suffered a serious of steep sell offs and today is well down from that price, see chart above. Perhaps when we look back at silver in the future it will look like it corrected at the old high and then smashed through it onto new highs (maybe late 2013 or in 2014 ?), but I am biased fully expect to see silver increase in value by multiples of todays prices.
This last chart shows bitcoins, I’ve drawn the level of the all time high as a horizontal red line at the top of the chart. Which way will bitcoins go? Can they break through in the near future? I am convinced there will be a steep correction or two along the way but very difficult to say when. Maybe as with gold, not until the all time high has been smashed. On this timescale you can see the RSI indicator is screaming overbought just now though. Could touching the old high trigger a correction? It would be quite a brave desicion to sell just now though I think. Heres a look at market depth.
There are evidently still sellers sitting at $30 level but to me it does not look convincing for being a trigger for a sell off. If this data gives a good picture of the market perhaps we just expect the price to hover around $30 for a little while longer before finally breaking upwards. I suppose the wildcard here is that there may be people with large enough positions who can move the market with a big sale coming out of the blue. The bitcoin market is afterall pretty tiny compared to other markets.