Quite surprised this morning to see how far bitcoins dropped overnight. From somewhere near $75 price started dropping, gathered momentum and then fell off a cliff down to about $53 or so, however from there it bounced strongly and has recovered up to about $60. To be honest I think we needed this correction, bitcoins have been going a bit too fast, don’t want it to run out of steam too quickly.
Heres how that correction looks on the 10 day chart, see chart above. Was there anything special about the region where it found support and bounced? I kind of think it matches the bottom of where I’ve been drawing in my new steeper channel, which I’ve tried to line up on this chart. In hindsight I could have predicted it might fall down as far as it did but I didn’t which is a shame, missed opportunity to appear god like in my predictive powers 😀 It was a very nice move for anyone with insight to sell when we were at the top of that channel who could buy them back today a fair bit cheaper right now.
Zooming out a bit to the 3 month log chart heres how its looking to me. Have drawn in the rough same channels as my previous post. As you can see the area where support was found looks like its added some validity to my latest channel. Of course nothing is set in stone and its early days for this channel, time will tell. The fact that it is logarithmic also means some of the rises and falls are going to be breathtaking in their size.
The last chart in this post is the all time chart for bitcoins on a log price scale using Mt Gox data (as usual). I’ve mentioned quite a few times that there was a long term channel we were in. This is the channel I’ve shown in green which goes right back to 2011 even before the 2011 bubble.
This channel is what enabled me to predict resistance at $50 and that once through $50 we’d shoot to the moon, where I’ve put an arrow showing the breakout of the long term channel. Will be fun predicting just how high this can fly, where is the next major level of resistance? Might be fun a topic for another post. Happy trading everyone.