Topic: Early 2014... (Read 4671 times)

I think Bitcoin is in a totally different situation now than it was in 2011/2012.

Aside from the fact that businesses worldwide are just beginning to become educated about the very real benefits that adopting Bitcoin can have for them, there is a whole new crowd of people with interest in Bitcoin as an asset, not just from a private perspective but from a business perspective as well (Second Market, Winklevoss ETF, etc.).

I do not think the time period 2011/2012 is representative for BTC-Market.
It started end 2012/beginning 2013

We've been through a 6 month lateral movement during 2011/2012 (if i remember correctly), I don't see any reason why this couldn't happen again. I'm thinking we're getting set to break the record of the longest lateral movement we have ever had in bitcoin. The adoption rate is increasing a lot faster now, but then again the money needed to cause another rally/bubble is a lot higher than before.

in stockmarkets lateral movements last only few weeks,so I think in the dynamic bitcoinmarket the lat-movement does not take that Long  as you were assuming.
But the best of these lat-movements is : the prevailing prior trend will mostly be continued

I disagree, the cutoff for 3rd party payment systems to deal with bitcoin exchanges is on the 31st, but it doesn't mean people cannot cash out on the 31st even if processing the payment to their account takes a few more days after that. It is very reasonable to expect a dip anywhere from Jan 28th - Feb 2nd and that is what I expect. People in China cashing out, people outside of China panicking and cashing out as well, and then those manipulators waiting a few days after the 31st to cash out on people getting in who thought the chinese new years storm was over.



Agree that each bubble takes us to a higher level compared to previous lows, and it's only a matter of time for the next bubble. But I do not think this will happen as soon as we think. I'm expecting to see a sideways motion for all of February as well... just because the China FUD will be over after the 31st (for now, but I can guarantee you they will bring more problems) doesn't mean the price will shoot up again. There is no reason for there to be another bubble right now, there are a lot of big hopes and plans for 2014, but nothing in the near horizon. I can see Feb being just as dull, if not worse, as Jan. Yes we've gotten a lot of bullish news that will help bitcoin in the long run, but these giants like Tiger Direct and Overstock are dumping enormous amounts of coins back into the market which is not helping the price right now for the short term. This will be overcome eventually when more and more people buy and use bitcoin.


But for the next month or two... I am still expecting a sideways movement, even if we break 1000 in Feb or March, I seriously doubt we will reach our ATH anytime in Feb or March unless something big happens.

@ T.Stuart
though I am a bull like you and therefore biased I appreciate your thoughts.
Difficult to argue against

Three weeks in...

For the past three weeks I have plotted the progression of the Bitcoin market alongside the green line trend I first proposed on 3 January 2014.

You can see the progression of the price, indicated by the yellow crosses on the chart. The red uptrend indicates a short break upwards predicted on 3 January, which subsequently happened.

As predicted, the trend has inclined sideways, essentially going horizontal for a little longer than the green trend line suggests.

Next week

In every post in this series I have re-affirmed the initial prediction that come the end of January, the price of Bitcoin will rise upwards and break through $1,000 convincingly. The progression of the market has closely followed the proposed trend, and the prediction remains unchanged.

Reason behind the current lack of upward movement

Despite the build-up of bullish good news and the recent bullish TA (19-day bullish pennant, recent Elliot Wave analysis), the price is still essentially flat after having been so for most of January. Why? The wait for Chinese New Year.

Back in December the Chinese Government told third-party payment providers to stop offering clearing services to Bitcoin exchanges. This resulted in waves of negative rumours, and many people have predicted a crash on 31 January as Chinese Bitcoiners sell all their Bitcoins and cash out at the last minute.

Your own experience

Ask yourself though, what is your experience with exchanges? If you had to cash out for some reason, and needed the money on a certain date, would you wait until this date in order to sell your Bitcoins, submit the transfer request, perhaps follow up to enquire as to the estimated time of delivery, wait as the exchange processed the transfer, and receive your money safe and sound in your bank account? Of course you wouldn't, because in the best case scenario the above series of processes can take a week to happen, and that really is a best-case scenario.

This means that if anyone in China had decided to throw in the towel and cash out, they would likely have done it already. Common sense also tells you that if the deadline for closure is 31 January, there could be a bottleneck around that date so giving extra time to cash out would be wise.

So the fact is, there is going to be no rush of Chinese people selling Bitcoins on 31 January. It would be too late. If they were going to do it, they would have done so already.

Of course even common sense is not enough to convince many nervous people outside China that the Chinese will dump their coins on 31 January, so that's why many are waiting on the sidelines, ready to buy as the price crashes to the low hundreds.

This is pure fantasy. The people waiting will not get the half-price coins they want.

Reasons behind the current lack of downward movement

The price of Bitcoin is supported at current levels because market sentiment has never been so positive. The daily bullish news count is very high. It is becoming crystal clear now that the ground-breaking technology that is Bitcoin has the power to streamline global payments saving enormous sums of money and time in the process. Depending on how you look at it (and also depending on correct education about it, which is starting to happen in the mainstream now) Bitcoin is also:

- a beautifully simple (as wallets are also fast becoming!) and secure digital currency.

- an extremely profitable, attractive and convenient asset.

- a digital bearer instrument that safeguards users' information from other users.

And there is so much more to come.

Not only is it obvious that Bitcoin has an important place in the world, but the rate at which it is possible for Bitcoin to be adopted is staggering. Bitcoin has come along at a time when the Internet has become sufficiently established so as to be able to support and sustain extreme viral effects. Together with the fact that it is open source (removing huge obstacles that would be present with copyrighted software) and combined with the network effect – the more users Bitcoin has the more valuable it becomes (not only in terms of price but also in myriad ways to do with its use as a payments system, a currency, an asset, etc.)  – this viral support is giving Bitcoin the opportunity to expand exponentially.

Investors with any experience know very well that it is now just a matter of being patient. As Bitcoin expands to fulfil even just a small part of its full potential, their investment will increase in value at a rate that out-performs anything else they could put their money into.

Waiting for the bargain of a lifetime

Bears have been consistently confounded throughout the consolidation that began on 7 January. With every red candle the forum has been awash with claims of “low hundreds”, FUD of all kinds and outright screaming and swearing. Hosts of newbie accounts have sprung up, spouting negative views.

Those waiting for cheap coins have been on the attack, and when all else has failed the conspiracy theories have exploded into life. It seems like the preferred course of action for some is to claim massive market manipulation, rather than simply to admit that their repeated claims for a capitulation into the low hundreds have not been proven correct, and that they are wrong.

Those waiting for cheap coins simply cannot accept the simple, common sense logic that says “If market sentiment is more positive, the price will be supported at higher levels”. But if they can't accept common sense then they need only look at previous “bubbles”. As time has progressed and confidence in Bitcoin has grown, price levels after each bubble have been consistently higher in proportion to the lows, highs and follow up prices of earlier bubbles. This is perfectly normal and of course to be expected for as long as confidence keeps growing. And, needless to say, confidence has received the biggest boost in the history of Bitcoin over the past three months.

Why the price will move up through $1,000 in a few days' time

As 31 January approaches and those waiting on the sidelines with the money that has been building up, see that the China doomsday crash they so desperately hope for is not materialising, acceptance of Bitcoin's current supported price will be the only option left to them. And with that acceptance will come the realisation that the time to invest is now, before the continued rise of Bitcoin that everyone expects this year kicks back into action as the bullish steam that has been building up is released.

By this time next weekend the sideways movement that has drawn Bitcoin out for 19 days so far will have come to an end. The uptrend will have been resumed, indicated roughly by the yellow line added to this week's chart.

+1
 
It also fits quite nicely with the double exponential price rise scenario.

Thank you, T. Stuart, for an excellent analysis of the current situation.

I can see either an explosive growth starting in February or an acclerated downtrend thereabouts. One thing I have learned, bitcoin tends to move in myterious ways, often surprising people with violent up and down swings. You have to be prepared to go with the ride.

I appreciate the time and effort you have put into the analysis. I tip my hat to you.

that`s my Impression of the Chinese as well. If they want to "fight" the  US $ and can do it with bitcoins they will undoubtedly do it.
But I think up to now they are not so sure how to do it and they don`t understand the options of bitcoins yet.

I hope everyone tries to use their own common sense when looking at Bitcoin and what will happen this year, and not rely on the madness they find here!  

But I must admit to getting somewhat carried away by all the "CCMF" when things get going though! It's irresistable!  

Are we at the moon yet? If not then later guys... wake me up when it's July

Thanks for your approvement

it does surprise me as well.
To many People are talking and writing about my NO-GO-WORDS:

chrash
bubble
collapse
end-game
doom
Rocket
Moon
Oort cloud

and to many are very shortsighted

I concur wholeheartedly with these points!

What continues to amaze me, I mean really amaze me, is that so many people here apparently can't see these things. I think quite a significant few still believe that Bitcoin is going to be banned in the US. I guess it takes time for things to seep in, as a year or two ago that a US ban appeared to be on the cards.

What is happening now is that government advisors, think tanks, etc. not just in the US but in the UK and other countries, are receiving information that is leading them to conclude that Bitcoin is just tipping right now into an extremely viral situation, and they are scrambling to make sure that they benefit from this. Just like the Chinese government understands that Bitcoin is on the verge of going viral in China, and they are moving quickly to control it in a tighter way (but I believe they will allow it to continue for the foreseeable future). Two approaches to the same understanding - things are going to move fast.

@ T.Stuart
since you made a good comment on the Situation in/from China I think it is up now for a comment about FBI/FED-SR auction.because I think it was great News regarding the legal-implications: Would this be realistic ?
Since there is an auction of the seized Coins the exchanges won`t be affected and the price remains at least stable.

And here another important jugdement:

Judge Orders CoinLab to Give Bitcoin to Bitvestment
http://blogs.wsj.com/moneybeat/2013/11/07/judge-orders-coinlab-to-pay-up-in-bitcoin/

So I think the legalisation of bitcoin is well going on and this is a very important and huge issue

What do you, T.Stuart, think about this?

Thanks segeln!

I appreciate your analysis very much,especially the China issue.
What worse thing could come frome China?
They are all prized in.
China could only surprise us with good news which would rise the price of bitcoin

Picking up from last week...

Looking at today's prices, we can see that after another week (week 2) of data we have been following the green trend line proposed in the OP closely, with the tendency to sideways movement playing out as predicted. The second yellow cross marks where we are today.

When I resumed our progress last week I made the point of saying that we might break back up into a rally and then fall back again to around the green trend, which we did.

Last week's post also made the following point:

“As we come towards the end of the month, the curve will begin becoming steeper again and this time we will break $1,000 definitively. This will happen just before or at the time of the New York Department of Financial Services Bitcoin hearing on 28 and 29 January.”

Hovering under $1,000

When I made the first post in this series on 3 January, I was asked about the shape of the proposed trend.

The current sideways movement reflects two things:

1. The psychological wall of $1,000.

2. The wait for the Chinese New Year.

$1,000

Although we are now seeing the first indisputable evidence of Bitcoin's move into the mainstream and of the beginning of mass-adoption, the barrier of $1,000 holds a certain power.

The Chinese New Year 31 January doomsday scenario

For several weeks now the forum has been awash with claims that come 31 January, we will see a mega-crash due to various factors including the Chinese dumping their Bitcoins and withdrawing their money from exchanges en masse.

A lot of people have been building up reserves of fiat to cash in on the panic sell they imagine will happen.

But think about it. With less than two weeks until 31 January, don't you think that any sensible Chinese person wishing to throw in the towel and cash in would have already at least sold their Bitcoins? I mean, how long does it take to withdraw money from the exchanges over there? If it is anything like over “here” then usually 5-10 working days in the best cases. And with the apparent rush to withdraw, wouldn't a few prudent Chinese whales have dumped already to get to the front of the queue?

The Chinese scenario is just a smokescreen. Chinese Bitcoiners are enthusiastic. They are also not doing anything illegal. The market for Bitcoin is going to continue in China and despite the FUD you read here, of all the official statements coming from the government in China none have claimed otherwise.

As it becomes clear over the following days that there is going to be no such mega-crash, those waiting for cheap coins will start to get nervous.

End of January

The pressure from China is keeping the price suppressed, and yet the behaviour of the market post China-bubble is incredible, with Bitcoins commanding a supported high premium. The change in market sentiment is palpable; we all know that over the days and weeks and months to come Bitcoin will keep exploding into the mainstream. Within the next few days we are going to see more large businesses adopt Bitcoin, decisions from the world's governments, and conferences taking place including the New York hearing. And importantly, as the Chinese smoke clears the market will lift again.

Holders

Over the past weeks we have not seen any panic selling. Whatever bad news has come out has only resulted in small-scale, measured sell-offs. Hodlers are controlling the market now. They know that waiting for the weeks to pass as 2014 unfolds is going to be very well worth it. It makes sense to sit back and relax now – no need for the stress of trying to trade unreliable intra-day trends.

In short, time has proven that investing in Bitcoin for the long-term rather than trying to ride the waves up and down is by far the most profitable strategy. But today, at this very moment at the outset of 2014, a potential investor has not only the security of past data on which to base their decision to buy and hold, but also diverse evidence of vast growth to come in 2014, adding a hugely significant extra layer of security.

This has caused the biggest change in market sentiment since the beginning of Bitcoin. This is what is being reflected today in the charts, and what I showed with my trend line two weeks ago.

EDIT: Just to point out the dangers of listening to TA experts on here, so far my chart has soundly beaten the predictions of at least 3 independent experts using all kinds of intricate methods.

KARHU once met a shoeshine boy who had tips and common sense once.

KARHU enjoyed the taste of his tears in the valley of capitulation. Give up your losses to KARHU before KARHU destroys you!

A week ago I posted the chart below, minus the yellow cross (which shows roughly where we are today).




As I proposed in the OP of this thread, the analyst Hellork was not able correctly to compute into his models, as detailed and technical as they were, the strong positive change in Bitcoin market sentiment, the game of catch up being played by exchanges as they deal with increased interest, and importantly the powerful force that Hodlers are exerting on the market. Beating his odds of 100:1 we broke up as indicated by the red line on the chart, and then fell back and consolidated to just above green line. We have not come even close to the capitulation he proposed as being much more likely.

If you look carefully at today's charts with a week of fresh data you will see that we are following almost exactly the slight curve towards sideways movement, proposed in the OP a week ago.

I believe that this trajectory will continue to progress as proposed.

But... Over the next few days we may break up into a rally as we did last weekend, travelling a similar distance upwards – past $1,000 and then losing momentum just as we did then. Yet again, in this situation, do not panic. Just as before, look for a measured retracement to the green trend line.

A recent post on this forum linked to an article at http://www.wallstreetcrypto.com/. Setting aside for a moment the preliminary subject of the article entitled “Was it Zynga? January in Depth” – news and its effect or lack of on the market – the analyst posted a chart showing what he calls a “Crash Zone”. Similar to Hellork before him, he posits that when we reach this area we will likely experience a large crash. He does include a caveat: “without a major catalyst”. I believe that the market sentiment today – what most professional traders are in fact trying to read from past data with whatever tools they use – is already sufficient to keep the price steady around the green trend line on my chart despite spikes up and retracements on the way. On the website I made a comment to the author of the article, Alpha FourNineTwo, asking for the odds he would give on his model's success, but the comment has not yet appeared.

To go back to my chart... As we come towards the end of the month, the curve will begin becoming steeper again and this time we will break $1,000 definitively. This will happen just before or at the time of the New York Department of Financial Services Bitcoin hearing on 28 and 29 January.

It is crucial to realise the depth of the change in market sentiment, due to the perception that Bitcoin has an almost certain future now in the mainstream and that this future is coming fast, a perception that did not exist after any previous bubble. This psychological change is extremely significant. Of course it is not as powerfully obvious as the adrenalin rush (choo choo!) during the incredible run ups in price as a bubble expands exponentially, but this brand new post-bubble market sentiment is what is causing Bitcoin to carry on floating lazily, miles above previous prices, well out of the reach of those who still believe or hope that a final crash is imminent.

Have a nice weekend and good luck to all of you!

Note: no geometry, mathematics, Calculus or triangles were used to create this report. Everything above and in the OP is based on common sense.