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Is Bitcoin in a Bubble? Of Course It Is!

What Is A Bubble?

From a technical chart viewpoint, a bubble is a specific pattern of the volatility envelop that resembles, well! a bubble…

Bubble-English

Volatility Shapes

 

What does match best the actual Bitcoin price volatility pattern?

Of course, it is the bubble shape on the left part of the above gallery:

2018-02-05_BitcoinBubble

Bitcoin Weekly Price Chart In USD

What is the consequence?

Once an equity price has not been supported by the  moving average that runs through the middle of the envelop and crosses below it then it rarely stops until it has made a contact with the lower boundary of the envelop or come close to it.

Where is the Bitcoin price going?

It will possibly retrace down to the $5,000 price level – give or take $1,000 – according to the scenario proposed already six weeks ago and any short term bounce should be short-lived:

We expect the Bitcoin price to correct down to $7,000, possibly even lower to $4,000. Let Bitcoin again make a fool out of your Charts And Trends analyst…

And nobody seems to like him
They can tell what he wants to do
And he never shows his feelings
But the fool on the hill
Sees the sun going down

2017-12-22_BitcoinUTMOverbought

Bitcoin Monthly Price Chart (22 Dec 2017)

 

Disclosure

We are short XBTUSD (via Kraken) from $8,600 based on this configuration posted yesterday:

2018-02-04-XBTUSD

XBTUSD Daily Price Chart

1 Comment

  1. How can we remain so optimistic about a cryptographically-secured future when quantum computing is just over the horizon? If these mathematical pillars can be pulverized by using a more powerful form of computing, aren’t we just building our houses on foundations of sand?
    Reply

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