Bitcoin is on a bit of a run, which is something I always enjoy. So with this in mind perhaps time for an update of my ideas and observations.
As usual please note my disclaimer and that I am not an expert in investing so please do your own research.
I’ll start with a chart, which is showing bitstamp on quite a large timescale with 1 week candles and log price scale.
Its become a bit cliché to shout ‘to the moon’ every time bitcoin rallies, but the real honest truth is that bitcoin is prone to large bubbles and has had a few already in its short existance. It is certainly possible for another one to develop. As bitcoin is still small compared to other global markets with lots of scope for investors to want in only to discover the limited supply. If it does go on another bubble you hopefully want to be in early and out with profit of course.
So could it be a ‘moon’ kind of move is already in its early stages ? Or is this just another rise within the flat channel we’ve had all year ?
Either situation is plausible at this stage. If bitcoin gets above $320 I’d say the bullish scenario looks very possible, until then I have a bit of caution that price may continue stagnating. There are still headwinds which as far as I know are not resolved, not least blocksize and scalability. But for bulls it is heartening to see that this is not enough to push bitcoin below $200 which is looking like a very solid floor so far.
If bitcoin is to go on another rampage it will be fueled predominantly over the next halving which is slowly and inexorably drawing nearer. This might swamp the headwinds I’ve already mentioned. As a recent example of a halving on price look at the bubble litecoin experienced recently. Also note in litecoin the bubble occurred and popped before the halving actually happened. In fact only later does the reduced inflation of supply actually start bearing on price, the bubble is pure speculation. Is the litecoin example a precursor of what may unfold in bitcoin?
If the bull scenario does unfold then maybe the green bull channel may give some idea of how it may develop. More on that if we get above $320 first.