Chart 1
Some savvy Bitcoin traders may have been able to profit by buying below 430 and selling above 455. For many people however, this somewhat stagnant price action has led to indecision and generally staying out of the market. In general the Bitcoin market has been bearish since the high in November/December 2013. However right now the price seems to be consolidating. I've spoken with many traders who think this is likely the bottom and the end of the bearish trend. I agree with this assessment an offer a prediction for the future of the market in Chart 2.
Chart 2
Now I know it is way to early to call a Cup and Handle. I also know this is extremely optimistic. However I can see something like this happening. I remember a large Cup and Handle forming after the rise in April 2013. It was a long period of consolidation followed by a quick drop and then an extreme bull run from ~110 to ~1000 (or ~ 2000 if your were trading on Gox). We may be in a similar period of consolidation right now. The dotted yellow line marks where I think the bottom of this cup is. If this pans out we will still likely have a rocky and highly volatile market but it should on average stay on course of the orange cup.
Again, this kind of extrapolating is hardly technical analysis, but I thought it was worth a share to my readers. If anything it can be something you can look at to feel better after making some bad trades.
- If you are new to Bitcoin please check out my post Bitcoin 101: a beginners guide
- If you are looking to learn about trading other cryptocurencies besides bitcoin (aka Altcoins) you might enjoy my guide on where to trade and exchange altcoins.
- And of course I am still doing an H2Ocoin giveaway!
-BA
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