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.