The long standing bear trend line has been tested quite thoroughly as support since my last post and so far has held quite well by the looks of it. Those times where the price dipped below the trendline made it look like a big effort to shake out more weak hands. But maybe those attempts are not really be so productive anymore.. with price managing to climb back up each time, in fact is that a bullish trend I can see forming on the end there? (which I’ve handily marked with a green line)
In last few months I’ve looked mainly at longer timescales and charts with 1 day or 4 hour candles, however heres a closer look at that (maybe) bullish line forming on another chart with 2 hour candles this time.
There are a few touch points on that line, will be interesting seeing how long it holds. Probably not long to be honest but you never know. My gut instincts are telling me that there is too much venture capital being invested for bitcoin to fall much further though. Is the bottom in? Maybe not. But when you also consider it’s scarcity, bitcoin is rare, I mean there is shit loads of ounces of gold compared to bitcoins for example. Maybe those stories you hear about bitcoin could be worth tens or hundreds of thousands of dollars, or millions even can be believed. If this isn’t the bottom its still cheap at these prices right?
So thats the bullish part covered, so why have I titled this post with nightmarish? What drew me into bitcoin was the promise of decentralised money and doing away with central banks. I know its a wierd concept for some but i have a strange belief that the world would be better if there was more individual liberty and freedom, especially where money is concerned and less theft of wealth from the productive to fund wars, control education and media etc via central banking.
But the blockchain which is now quite a few gigabytes long is growing relentlessly. As bitcoin adoption grows the blockchain starts to grow faster. How long until it is too big to be decentralised? Years? Or maybe only months? How long until everyone is using wallets which don’t need to download the blockchain, many already do. It will be quite a smooth transition. When you abandon the blockchain you hide the hassle of the details. You pass away some freedom for convinience. You end up with centralised money. Except this time the centralised money has a public ledger. Is that nightmarish?
Which is actually also bullish for price.If you think about it. If the powers that be see an opportunity to create a global centralised controlled currency in which all transactions are public will they get behind it and ensure its success? After shaking out more weak hands first of course. I’m not naive enough to think bitcoin is immune from inflation. Look at gold and silver for proof of how derivatives can obscure true quantity, ownership and value.
Unless the bitcoin devs can think of a convincing way to keep the blockchain decentralised then I still retain these nightmarish visions of future bitcoin. I wonder if the future salvation may lie in something like that maidsafe project? http://maidsafe.net/ Could the blockchain remain decentralised where everyone owns parts of it instead of all of it? Or something like that.
On a total tangent heres an advert from fosters beer which is airing in the UK just now.
Apparently we should abandon thought of the economy. And presumably continue to be happy debt slaves drinking beer. On that thought maybe i will have a beer, but not a fosters.