Our patience has paid off
It’s the middle part of March 2015 right now, the sun is shining and signs of a long winter are slowly fading away. The beginning of spring seems to have helped Bitcoin reach equilibrium against the US dollar. We have closed quite a few long positions since our last Bitcoin related article and now it’s time to sit back and observe the market a little closer because we are bound to have some drawback right about now.
Bitcoin price in March 2015
We are reaching closer and closer to the overbought market condition which most likely means that the price is bound to correct itself pretty soon. There are good solid support levels around 286.675 and 283.701 and it’s likely that the price is going to try those levels throughout the other half of March, 2015.
Unless something extraordinary happens in the crypto currency world I estimate another bullish run not before April. So bulls, I’m afraid you’re going to have to hold back for a while, but know this: your time will always come!
Riding the bulls
The last few days have simply been amazing. On the 9th of November I published a short article about the bullish movement of Bitcoin and just three days later the price has reached $400 USD.
So what now? If you look at what happened on the 11th and 10th of November then you can see a great struggle between the bulls and the bears. The market was unsure how to react, but it is clear to everyone now that bulls have won this battle. At least for the moment.
Depending on how today’s candle will close we might see another one, perhaps a bit smaller to form tomorrow.
The only thing that bothers me is the RSI which shows that we are reaching the overbought market condition very soon. When this happens you can expect a short price decline all the way down to $360 area, but it’s unlikely to hit that low.
Why? Because not only did the Thailand mining rig burn down, the FBI closed a ton of hidden services recently which means that a great portion of Bitcoin users just lost their Bitcoins. This should in theory make the crypto currency even more expensive so the bullish momentum might just be gaining its strength to a much higher level that what we’ve seen this far in which case our next stop will be around $440-$450 and upwards!
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.
My 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.
The 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.