Bitcoin technical analysis

Thanks! It's just facinating that it works so well. Sending coins back and forth

It's CPU mining only. Using some computers at work and a 30 days trial ong Azure. Thanks for the 20 cores Microsoft Datacoin is a new coin, with a different focus ala namecoin. I heard about Mastercoin at Lets Talk Bitcoin podcast yesterday. Gonna check it out today.

-s-

True...........it is fascinating, thanks to you smartypants...........I PM you..........

Had to enable PM.

...........Jesus there is a lot of coins out there, but I think BTC is the one to watch smartypants ah?

ok

did you got my PM?

This is good advice and i've settled on a Bitcoin buying strategy that works for me. Here's my thinking about Bitcoin (of which I only became aware of its existence in December 2012):

Obviously with buy-and-hold you want to buy at the absolute lowest and sell whenever you can be certain that a top is in place. Now if Bitcoin had a historic range of $50-$100 logic would dictate that we buy below ~$60 and sell above ~$90. But the actual historic range is $0.04 to $1200 (and something) - that's a massive range - it's a rags-to-riches range unlike any asset before it:

absolute growth = 2,999,900%

annual growth = 1,216.07%

OK, so assuming it's not going to repeat that growth rate but at least continue growing until it reaches a maturity plateaux, we have to rationalize our range expectations. Following the previous (April) wave formation strong support could be seen around $50, at $100 and $250. But at that time Bitcoin did not have the same participation or place in the public mind... so we can fairly assume demand has notched the support floor to $100 - and that's being liberal - just imagine the average punter's appraisal: "$100 for a Bitcoin? Let me buy 2 and see what happens." By comparison, imagine Gold dropping to $750 an ounce - massive demand means it won't stay there for more than a few seconds!

Bitcoin crossed the $1000 level several times before coming down to the present $700 level where it has ranged following the news that China is regulating it. So that's been priced in. A few weeks before when US authorities (and Senate) concluded that Bitcoin is a crypto-currency which they cannot (currently) legally regulate, the massive upsurge from $300 began. So that is the clue. The public and market participants are concerned about regulation. How safe is it to put my money is this? Will it be declared illegal? So the main driver is fear & expectation of Control by Authority (government). The other side of the Bitcoin is unbridled hope for a stellar surge in value of this innovative new "thing". No doubt hope can switch to raw greed very quickly (but that part is still to come). Hence we see evidence that in participants' minds $1000 is an achievable target - if not a downright expectation.

Now that the profit taking is waning and everone who made a killing has cashed out, we could anticipate 3 things:

1) existing participants will want to get back in and hold for at least the previous high above $1200.

2) new participants are going to want in. These are people who might have heard of Bitcoin and now also want a piece of the pie - like the early adopters before them. This will lead to another wave where a bigger herd are going to be piling in.

3) The media coverage of Bitcoin is now changing tone. The type of speakers and the range of adoption this shows is the beginning of mainstream acceptance: Central banks are making noises that equate to cautious acknowledgement, banks are making forecasts, Bitcoin ETF (formerly invisible) are making performance reports, CNBC has a faux-dorky opinion, luxury vehicles are being paid for using Bitcoins, university tuition, beer, online services, and so on... All of the aforementioned are to be expected but there are implications - more liquidity and an increase in the complexity of the market - and with it - the dirty hands of the big establishment players.

In the light of the above 3 points, it is unlikely that Bitcoin will ever see $250 (nevermind $100) again. And at the top end the expectations are unlimited. Yet limited. To what? $1200 ? $2000? $10,000?. Let's look at how many Bitcoins there are in circulation and weigh this against the total output of 21mil by circa 2144AD (remember that Bitcoin output is regulated to slow release by the Bitcoin source DNA)



So from 0 to 12mil in 5 years and that amount will slowly double over the next 130 years. Consider that all of the current Bitcoins in existence are owned - they're in somebody's possession - and the additional 1mil or so that will be added in the next 3 years cannot be rushed or printed... you should be seeing implications that make you sit up with new realization: The finite resource will only increase by a negligible amount in our lifetimes and there is a chain of implications with only one answer: much higher prices that $1200!. If 99% of the coins available to this generation are already owned then anyone who wants a coin can only obtain it by buying it from existing owners. Bitcoin can be bought with fiat or with other crypto-coins - and if more and more parties (including banks and investment institutions) want to participate they can only obtain crypto-currency by buying it from Bitcoin exchanges which results in direct upward lift of the BTC price. This increased participation is now happening and it will escalate with or without the banks. Some Bitcoin owners will sell their Bitcoins because they think $1000 is a great profit on their $10 investment. This is how the Bitcoins will filter to those who are willing to pay for it - an existing owner must willingly sell for a fiat value they believe is worth parting with their Bitcoins for. And as more people pile in the value will increase until it reaches the critical mass where greedy late-comers buy at the very top prior to a profit-taking or fear-induced sell-off! This is why I believe there is potential for a massive wave with broad participation. It may not be the next wave up which (to me) looks to have 1400 as a target. Perhaps beyond that top and subsequent correction we could see a steady rally of several thousand dollar proportions.

I actually meant to write about my Bitcoin buy strategy, but Sunday afternoon took it's own meanderings. Next time, i'll post that. In conclusion: A range from $100 to $1200 is established and we're in the middle of that range right now. Anything lower than $700 is a buy for me. Unless the wave count shows us something else - the next selling point is beyond $1200.

Within reason, own a bit of everything - you don't know which will be hits and which misses, but the most significant thing is: you can buy Bitcoin with other cryptocoins, so their exchange rate to oneanother represents leverage - not now but down the line. Also: the regulators can only do their dirty in relation to the USD and other fiat, but in amongst the crypto-coins its free trade and you want the benefit of that.

aside: the USD is already a "virtual" currency, but it's not a crypto-currency yet and can be counterfeited on- and off-line. Later they will have to convert it to crypto-currency status and at that time owning some LiteCoin will suddenly not be so lite.

I see venzen , thanks........

venzen a friend of mine bought BTC in coins, physical, how is that possible?, is it possible? or they sold him counterfeited coins?

wow venzen awesome post...

so do you conclude that litecoin is like silver?........ undervalue? so litecoins it is, lets do it........

venzen I still can see my money in the MT4 platform and I did all you told me, I most to do some wrong, should I contact them?

.......Had to do it sorry, I fall in love with the pic.......


http://i.imgur.com/upTsvz9.gif

Bitcoin will crash way below 100, disappear and get reincarnated as a new craze that will enthrall the masses.
The herd needs it the herd wants and demands to be used and abused, the herd is (financially) self detructive, always was and always will be..

Man has never set foot on the Moon!

But their boot

Yeap, kinda like bitcoin bullish flag.

Was I in time for the Train Wreck ?

UP?