Bitcoin… oh Bitcoin, what are you up to now?

Bitcoin price trend

 

When you look at the overall chart you can clearly see that the price of Bitcoin has gradually declined since June 2013. However, the lowest point of around $280 was reached in October and it hasn’t been touched any more. It seems to me that there is a great potential for trend reversal especially because the last three days have closed higher than the previous.

 

Last three days bitcoin price risingWe have to wait a little longer to confirm this, but things are looking rather good in my opinion. Remember 10 days ago where I didn’t recommend opening a position at all, but if you really had to, I suggested to go long? (Read more about it here: http://ynef.net/bitcoin-price-acting-as-expected-is-it-time-to-open-a-long-position/). It’s never a good idea to trade against the trend, but going long should make sense right now.

 

Right now the $360 area seems like a solid resistance level. If we break this level there is great potential for further upward movement. In long term it’s already a good idea to buy a few Bitcoins and just sit on them for a while. They’re bound to go higher eventually.

 

 

Bitcoin price MACD indicatorWhen you look at the MACD indicator you can see that when the lowest point was hit in the first half of October the two lines crossed higher than previous in the second half of the same month. There’s a big chance for the crossing to take place again any time now which should drive the price even higher. Also notice how MACD keeps making higher lows!

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Bitcoin price acting as expected. Is it time to open a long position?

More than a week ago I made a bold prediction about the Bitcoin price and suggested that it would probably touch the $400 mark, maybe even $420 before going down again.

Guess I was right! A few days later the price moved up to $420 and gradually started falling until yesterday, the 25th of October, we finally met our first support level around the $350 area.

So… now what?

Picture of a virtual coin- bitcoinThere is definitely room for the price to move further below all the way up to $280 which seems to be a very strong support level. Then again our current position might very well be just a higher step on the stairway to heaven ;)

 

Right now I wouldn’t recommend opening a position at all, but if you must, then a long position should be fairly safe at this point. For a quick profit you should go long with a target at the $380 area. Actually I wouldn’t be surprised if we break the $420 mark in late November.

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Behold! The Bitcoin bulls have returned and prices are now on the rise

 The bulls have returned

Just three days after I published my bold Bitcoin price prediction the price has behaved exactly as predicted.

After gently touching the $280 area the price held steady on $350+ for a few days and later climbed to $400. In my previous article I mentioned how media can influence buyers and sellers:

I wouldn’t be surprised when in about a month Bitcoin will receive more media coverage and everyone would be saying that it’s the perfect time to buy more coins due to the relatively cheap price compared to what it was 6 months ago.

I guess my timing was way off! I predicted this to happen in about a month, when in fact the important news coverage happened just 3 days later. Read the article that says to buy more Bitcoins here. Let me quote:

Now is the time to take two hands and buy buy buy. I expect a sharp rally to $330-$350. The price will consolidate around those levels and build a base for a move higher into the year end.

Almost exactly the same as I predicted in my previous article. It seems that the psychological support level of $300-ish held nicely and with a little help from the big boys (media) Bitcoin prices are on the rise once again.

Bitcoin price showing a downward openingMy own technical analysis

My personal setup however is still showing clear signs of a downward trend. The MACD (Moving Average Convergence-Divergence) indicator has opened downward, is expanding and making lower lows.

 

 

 

 

 

RSI Relative Strength Index is not showing oversold conditionThe RSI (Relative Strength Index) is not showing any signs of Bitcoin being oversold which would mean more buyers on the market although I’m sure it will get there eventually.

 

 

 

 

 

 

 

Basically the fundamentals (news) are saying it’s time to buy Bitcoin because the price will rise in the coming months, but my charts are showing no signs of the power of selling to disappear any time soon. Why is that? Could it be that my technical analysis is simply wrong? It’s possible. It could also mean that the Bitcoin hype and the people who believe in the prices rallying thanks to media, are collectively more powerful than technical traders.

Whatever the case might be you still have to consider the fact that new Bitcoins are still being mined every day and the miners are selling their coins for profit. The constant flow of new Bitcoins is slowly diluting the market and making Bitcoin cheaper either until the amount of Bitcoins reaches it’s maximum value or until the process of mining itself becomes too expensive for it to make sense mining them.

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Ynef’s take on the current price of Bitcoin and Bitcoin price prediction

Bitcoin price in the year 2014

 

Bitcoin is the most popular cryptocurrency right now and it will remain the most popular and most traded cryptocurrency for at least a few more years or until someone comes up with a better alternative.

 

Picture of a bitcoinThe price of Bitcoin has been quite volatile throughout the year 2014. It has touched the $1000 mark and dropped back to $300. In December 2013 we witnessed Bitcoin find resistance in the $1200 USD mark – the highest price for Bitcoin yet. This was mainly due to extreme media coverage that Bitcoin received in the second half of 2013. Literally every news agency in the world published controversial articles about Bitcoin back then and investors went crazy about it. I can’t be a hundred percent sure, but I believe that this was done intentionally to manipulate the price. In theory it shouldn’t be that difficult in the Internet era.

 

When I look at the Bitcoin price I always consider the possibility that there are still price manipulators out there who control the market thus making it incredibly risky to invest in Bitcoin long term. Basically any one person or organization that holds more than half of the Bitcoins at any given time can easily manipulate the price by for example dumping most of their coins all over the market in a short period of time. Who owns the biggest Bitcoin wallet you may ask? The FBI does ;)

 

Graphic image of the 6 month price for Bitcoin cryptocurrency

Technical analysis

 

When you look at the charts you’ll notice that since June 2014 there has been massive selling of Bitcoin about twice a month resulting in an overall price drop, followed by a weak bullish run and an even greater selling frenzy shortly after that. This has been going on for the last couple of months now and has brought the price down to just $300 USD per coin. For now we have found support around this area, but how long will it hold? 300 is a nice round number and a great psychological support level, but we have already tested $280 once!

 

I predict that a small bullish run to $400, maybe $450 is likely to happen in the coming weeks followed by another drop to $300. Looking at the overall trend it’s obvious the price should penetrate this support level, but I wouldn’t be surprised when in about a month Bitcoin will receive more media coverage and everyone would be saying that it’s the perfect time to buy more coins due to the relatively cheap price compared to what it was 6 months ago. This of course could skyrocket the price back to at least $600 area where it was in the beginning of summer 2014. That being said, my current setup is literally screaming BUY now.

 

Media marionettes picture

Media influence

 

I’ve always known media was a powerful weapon, but I never realized how powerful it really was. To prove my theory of how media influences people to buy or sell their coins I decided to check my local news portal for clues. First I looked at the 6 month price graph for Bitcoin and then I searched for news articles about Bitcoin that were published in the past 6 months. And guess what? I found that every time media says something big about Bitcoin the prices will fluctuate a lot! Whenever there’s news that some big corporation started accepting Bitcoin you should be prepared for a rally. Remember when FBI put a lot of coins on auction? The prices came down like autumn rain. Of course this was expected because there were actual coins being dumped on the market, but when a corporation like Dell starts accepting Bitcoin out of the blue the price rally can only be temporary because there are no actual coins involved.

 

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