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.