Bitcoin had a monumental year in 2013. We may be seeing an ‘early majority’ adoption of cryptocurrency happening before our eyes. In any case, if you’re just joining the BTC party, there’s a couple of things you should know. By the way, I’m no chart master and my levels are eyeballed here… don’t trade them.
First, you may be shocked to learn that Bitcoin has been around for a while, like, over 3 years. The first time we ever touched $300… last month. We went more than 2 years without even touching $100. We’ve also seen a crash to $0.01. My point, BTC has ramped, crashed, and continued to rise its entire life. That’s what it does and we may just be seeing a continuation of that pattern.
Take note of the chart below. This is an example of when something goes ‘parabolic’. In a few months, we ramped from $300 to $1200 and saw the market lose it’s ability to efficiently price (volatility). Volume is down, spreads have opened, and price action is crazy. The instrument can not establish major levels of support and when selling occurs, there is nothing holding it up.
The last high volume range we saw was ~$50-$250 in Q2 this year. That was where we last saw signs of the ‘big money’ (AKA not speculators). A healthy uptrend will retreat to high volume ranges and confirm support. That pulls buyers back in and helps drive bull markets. Until we rediscover those buyers, selling will take us lower. That is why I think we’re headed for a test of the $50-$250 range, and have thought so for weeks.
My crystal ball sees a 200 handle print before 2014. Regardless of when (or if) that happens, the world wants to know if Bitcoin can hold the line. Where it goes from there will tell an important story in the history of cryptocurrency.
What do you think about Bitcoin?