A Long Term Look at Bitcoin

28 thg 10, 2018

BTCUSD



As we know, each asset class has a cycle. Stocks have 7 year bull and 2 year bear markets. Commodities peak every 30 years. As for cryptocurrency, we don't have ton of data. The best we can do is look back on Bitcoin's cycles back to 2009. Apparently, Bitcoins cycles last about 2 years. There will be a 2 year period of growth, followed by about a 2 year period of decline and consolidation.



In this video, I display a logarithmic chart with a trendline to represent Bitcoin's path.

At the peak in 2014, Bitcoin consolidated from $1,120 down to $156. That's an 86% decline. During this decline, it had a drop in volume, the price crossed the 100 and 200 week moving averages, and reached an oversold position with an RSI of 30. Notably, at its final bottom, Bitcoin experienced a climax sell with a strong spike in selling volume. Price then slowly rose, crossed over its 100 and 20 week moving averages and started a new bull run.

Today we have seen a 66% decrease from the peak in December 2017 but have yet to see a cross over the 200 week moving average, an oversold condition in the RSI, and are still far from the logarithmic trend line.

In general, I think Bitcoin is a great land grab to be apart of, but I can't sit here and preach that the new bull run is starting this year. In fact, I think the next 6 months will grind on, sentiment in the market will drop, and Bitcoin will be referred by the mainstream news as a terrible investment. I am also looking to see a climax sell here. We have not seen that yet.

Until next time.