Bitcoin Long-term Perspective

Long-term I see a bullish trend for BTC. The pitchfork clearly shows that BTC is moving in an upwards direction, even with the dramatic fall throughout 2015 to ~$150, which still proved to be a higher low across the long-term time-frame. However, as with all things measurable, there will be a constant deviation from the Mean value.

The overlay of sine waves in the chart above helps provide an indication that the deviations from the Mean - the peaks and troughs - appear to be happening in a predictable time-frame/pattern so far; they suggest that the price could have already peaked for this time period and that the next dramatic rise may not occur until 2020.

Thankfully, of course, this is only hypothetical based upon previous price movements. The result of the BTC ETF (due March 11th) if successfully passed could lead to a new upper price paradigm. But until that point it would be prudent to maintain a defensive outlook to prepare for the Shorts.

Please be aware that the blue diagonal support/resistance pattern doesn't mean we will see a drop to $200 (though it's not impossible), what it does is provide a very basic indication whether the BTC price has started to break out of it's hitherto existing support/resistance paradigm. April 2017 may provide a good indication of this where the diagonal blue line transects with the red support/resistance line at $1000.

The red support/resistance lines combined with the pitchfork do suggest however that a drop to $400 support is possible (not probable). I wouldn't take that as being a bearish statement, merely an opportunity if the BTC ETF fails to be passed or if something dramatic occurs around the corner. Also consider that a positive result could already be being priced in to the equation and that a fall will occur even if the news is positive ("Buy on rumour, sell on news") around the date of March 11th. And that is something that should be prepared for.

What the turquoise sine wave appears to show currently is that we are within or just about to exit a period of peak price, at which point BTC can be expected to naturally fall. If the price breaks out of this sine wave pattern on the upside then the sine wave can be re-aligned or scrapped. On the other hand, the red sine wave shows that a price of $1400 could still be possible in the next several weeks. Bear in mind [pun not intended] however that a jump to $1400 would mean a new all time high. But this would also be surrounded by all the major characteristics of a price bubble (see http://www.investopedia.com/articles/stocks/10/5-steps-of-a-bubble.asp).

And what happens to bubbles?

What we then have is the potential for a rapid price decline, in come the Shorts, FUD (Fear, Uncertainty, Doubt) and new rounds of stories proclaiming that "Bitcoin is Dead", new rounds of real or imagined financial, legal and political pressure and downright negativity. And crypto-currency speculators will then likely move their money into Alts for more rapid returns. Remember that the last crash in price has taken several years to recover from (but on the plus side allowed a greater number of new investors to get on-board).

Of course, something could happen to make the BTC price completely break out of the red sine wave. In which case we have major bullish sentiment. But the price always has to return to the Mean and the pitchfork shows us that even with a major price rise, a drop to $800 could still be expected into the 2020's.


Sometimes it's best to play the devil's advocate.


These opinions shouldn't be considered as trading advice. Always conduct your own research before making a trade. And only invest what you can afford to lose. Only the whales know which way the waves will flow... and sometimes even they get it wrong.
Trade safely!


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