Heres a bitcoin chart on 1 day log price scale from Bitstamp
Anyone familiar with my blog will know that I like to look at longer timescales. For this reason my charts don’t tend to change very often. The bullish fork which I have followed for a long time now is still there, still seems valid and is still the main focus of my chart. In fact even though bitcoin has had a peak near all time highs and a crash caused by the chinese banker interference it hasn’t ventured near the bottom or the top of that fork so far.
However the last couple of months have ‘painted’ what I call a mini bubble. This is like a small fractal version of a real full scale bitcoin bubble (which leaves the previous all time high looking like a tiny ripple). Closer view here
The reason I used the word painted to describe this mini bubble is because it seems like PBOC (peoples bank of china) have deliberately intervened in the bitcoin market at least twice ‘to prevent money laundering’ and ‘avoidance of capital controls’ or some such rubbish at the opportune moments possibly in which to make the chart look like that, ie it was painted.
One could also argue that the only reason they could successfully do that was because the market was in fact overheating and due a correction anyway.
The rising price for the first peak was halted by Chinese officials inspecting exchanges. It is interesting they picked that price in which to do so though. I think they may have timed it to try and have maximum negative effect on bitcoin price. In the aftermath of that they also banned the biggest exchanges from permitting margin trading and enforced trading fees. Interestingly this seems to have had the side effect of making people see that the fantastic Chinese volume was a lot of hot air and helping realise that China is perhaps not quite the force we had thought.
The second time rising price was halted by PBOC in the last few days, was when they enforced Anti Money Laundering regulations on same exchanges. This has painted the top of the dead cat bounce. The knock on effect somehow, for some reason, because erm… there is a reason, wait … bitcoin withdrawls have been halted for a month! What was the reason again? Lol, who knows? Spider senses are tingling here. Why does this need bitcoin withdrawals halted? Who knows? It could easily be that Chinese exchanges are in fact in some deep doo doo and have lost peoples bitcoins. Like Gox. For the millionth time. DON’T STORE YOUR BITCOIN ON AN EXCHANGE
Anyway I’m running out of time to keep writing, as I have things to do. In closing with a very short condensed version I still think bitcoin has high likelihood of another epic bubble in not too far away future. Perhaps as discussed in my last bitcoin post after a bearish handle of a cup with handle formation, or maybe it won’t even wait for that handle. I view it personally as too risky to sell and hope to buy cheaper although that may be the right strategy for some. Also, as always remember, it is a risky investment, trade accordingly. Keep your bitcoin safe.