Bitcoin has fallen (some might even say crashed) down below my “End of the Bear Trend” channel .. So is it now the end for the “end of the bear trend” ? Are prices doomed to continue falling as bitcoin falls to a spectacular demise?
First heres the damage on btc-e log price scale.
As shown bitcoin is now below the bullish channel I have been following. However not unsurprisingly my next move is simply to look for the next lower parallel following same slope up., perhaps where I have added a new dashed trendline.
Despite numerous threads in the bitcoin talks forums describing this drop as a crash, really it is not a crash (not yet at least). In fact viewed objectively it looks like the market is not up or down but rather horizontal, you might call this a boring phase. Bullish and bearish impulses are cancelling each other resulting in … a stable price. (Dont get too excited about stable price yet I consider the bitcoin market is still tiny, either upwards (or downwards) big moves will occur soon enough.
What is not helping matters is the debate (feud?) regarding blocksize. It appears that uncertainty could be hindering things. Bitcoin opinion is split on wether to increase the block size now before blocks start being too small to cope with increasing demand or to continue as we are and hope miners muddle through, perhaps using increasing fees as a way to try and prioritese transactions. This split could lead to an actual split where bitcoin separates into two forks. I have yet to hear why bitcoin cannot have dynamically sized blocks which are exactly the size they need to be, but presumably there are reasons it needs a hard coded size.
In all honesty both possibilities fail to inspire me with much bitcoin love. (Will this open the door for some other alt to pick up the baton ?). However I think bigger block sizes will be received well by the market (although at cost of further centralisation because few people will cope with storage of such a hugely increasing blockchain which is already becoming a little too big to easily sync and store)
Regardless of that debate, from pure price perspective we are still some way above the recent bottom. I have no reason yet to expect that to be broken to downside. Heres another chart again on log scale but zoomed out this time.
I normally show the trendline supporting “the bottom” on a linear price scale but heres an attempt to show it on the log chart, which results in a kind of flattening curve on log scale.
The other main feature of this chart is the very well defined bear trend resulting from all time high and subsequent bubble collapse, shown with red trendlines.
The end of the bear trend will be the final defeat of the upper red trendline. Before that there is the red dashed line to suprass. Although these lines have provided very stout resistance they are falling rapidly and I expect will be beaten when price is too low to fall much farther. Bitcoin block size debate finally being resolved might provide a spring board to finally beat those trendlines.