XBT Calming
Analysis summary: Predicting a calm for the next week or two. I’m not expecting any serious rallies or dips for the next month. Also, for what it’s worth, I don’t buy into the precision of a bubble theory or bubble cycle in the form of /u/moral_agent‘s charts.
Bitcoin Technical Analysis for Early Q3 2014. #
Ah, Bitcoin. It’s seriously a rollercoaster when it comes to investing/trading the XBTUSD* market. Over the last month or so we’ve had a number of exciting developments, which of course are reflected in the price history in the chart. But now it seems we’re coming back to the middle-of-the-road as far as price movement. goes. Notice how close we are to the green support line labeled “The long-term support line starting April 10th…” We’ve bounced off it (and hard) a couple times, and are now returning to it once again with less velocity.
Reviewing Indicators #
Unexciting as it may be to review the UO and RSI, it’s nice to see some reasonable figures (something just below 70) to coincide with the Commodity Channel index returning to sub-100 values. Those three concurrently showing moderate behaviour tell me that we are getting stable and re-asserting our footing above $600USD. MACD is also hanging around the 0 line with no strong upward or downward direction on the horizon. I find it comforting that on top of the rest of these stabilized-looking indicators, the Mass Index is heading downward - meaning an interruption of the current course is unlikely, and that our current behaviour is likely here to stay. No bulges in our immediate future! Our volume has subsided some compared to early June activity, but that’s to be expected when there’s no clear “buy now/sell now” entry/exit points right now. (Sorry if you were reading this far looking for advice on when to buy/sell, I can’t say either is particularly attractive right this second!)
To continue off that parenthetical, I may as well add some qualifiers to show that as much as I like to think of myself as a permanent Bitcoin bull, I can’t say all the signs are pointing north right now. They’re not bad by any means (stable price action is good as far as I’m concerned), but the price action right now doesn’t tell me it’s going to be shooting up anytime soon. Slow positive growth? Yeah, I can see that happening. But again, I’m not expecting it to be anything but slow as far as that goes. Right now is a good time to buy things with Bitcoin. And yes, for those who come from /r/bitcoinmarkets, this is me officially saying I’m not sold on /u/moral_agent’s Bitcoin “bubble pattern” theory. As much as I love to follow along and hope for it to be true, and enjoy /u/moral_agent’s efforts, I can’t confidently say it’s an accurate portrayal of Bitcoin’s future, otherwise everyone would be buying and selling on the same schedule.
It wouldn’t be prudent to overlook the non-charted aspects of Bitcoin that are factored into the current price activity - or more importantly, those that aren’t. The fundamentals of Bitcoin have not changed. We still buy and sell with it, and hope it continues to solidify its place in the world. We still trade it, buy-and-hold it, and stare at the number of confirmations for a good long time when a transaction is going through. Nothing significant has changed (for better or worse) with the coin, and unless more major news-worthy events occur, we likely won’t be seeing another bubble for a good long while. I am not expecting a bubble-like explosion in Bitcoin valuation for the next two months at least. I personally believe that the limited nature of Bitcoin warrants a much higher price tag than it holds today, but we won’t be seeing that opinion tested until getting coins becomes an actual issue of scarcity. Right now if you own a Bitcoin, then great - you probably bought it off someone or from an exchange. All it takes is a monetary transfer, the likes of which happen daily. But one day, when all ~21 million coins are mined, there won’t be enough coins for everyone on Earth to own a full coin. That’s decades away with current computing power, so the valuation with regard to that fact will not be realized for a long time. For now, the price is the price and any ramp-up in value will need some serious event to drive it. And I see none thus far.
That’s my take on Q3 2014 Bitcoin price activity.
As with all my technical analysis posts anywhere on the internet, I am morally obligated to remind you that I am not a smart or clever man. My findings and predictions are as fallible as any, and I am often wrong on specifics. Markets can be unpredictable and you can lose money in significant quantities if you follow my thinking and use it as advice - which you shouldn’t. I aim to spark curiosity and encourage self-driven learning. So do your own analysis!
Also: For those of you who aren’t familiar with Technical Analysis and want to learn, I wrote a 7-part series on TA for Bitcoiners for /r/bitcoinmarkets. Learn those fundamentals and make a trading plan with your reddit comrades! #
*For those who aren’t familiar with Bitcoin, the short term can be represented as BTC or XBT. The reason for XBT is that if (when?) Bitcoin becomes a tradeable currency on the foreign exchange market, it will need an ISO currency code, and “BTC” is not an official currency code adhering to the ISO 4217 standard.. Just as Gold and Silver are XAU and XAG respectively, we expect XBT would be the next logical choice. I use it for wishful thinking for the future, and clarity toward those who are familiar with the ForEx but not with cryptocurrency.