I wrote my last post around the time that the US$ price on MtGox was breaking through the top of my bear fork. Since then theres been quite a nice rally up to about $800 where we are now. As pointed in comments there has been some positive news with overstock.com now accepting payments in bitcoins, I confess I never heard of them until then but still, its hard to argue is not good news for bitcoins. My feeling is that the rally may have been more fueled by speculators switching long after seeing that down trending line being broken.
Anyway heres that rally shown with my MtGox bear fork on a chart with 4 hour candles.
You should quickly spot again Ive shown a divergence in the momentum, seems to be a lot of these lately. This time I wonder if the bulls are running out of steam. I have also stuck in a cloned trendline from the fork, time will tell if this slope is still playing a part in the shape of the price, I have a suspicion it will, perhaps not excatly where I have placed it though. Not going to show the chinese bear fork but the story is the same on that one more or less.
Even with positive news and a break up through the down trend I cant shake off a nagging bearish feeling. I have accumulated some bitcoin prior to this rally but if I was using a proper trading website might have been tempted to sell them again and take those profits. With the spread on localbitcoins only longer term trades make any sense. (On that note if anyone recommends a good trading website I might decide to dabble a bit more with shorter term trades).
Reasons I still feel bearish in the short to medium term has been discussed in a previous post but goes back to how the long term log chart looks. Assuming this is a bubble collapsing, this time fueled by authorities clamping down in China (and India I think I also heard?) it looks like there is still more downside before this fully corrects to me. Don’t hate me if I’m wrong and remember your trades are not my responsibility 😉