Bitcoin is about to move and move definitively. Guessing the direction is an another challenge but the timing is very important than direction. If you know something is going to reprice imminently, then when it begins to do that, when you can jump on the direction, knowing the direction of travel will be significant. Make or break the times in markets do arrive and bitcoin is at such juncture.
What you see below is the end of a reprice series where the market has struggled to agree on a price for bitcoin. This may results in a series of rallies and dips that have developed into a tightening range. Once the range has shrunk to nearly nothing the price of the asset which enters a new phase of discovery. Once the price is agreed the market is then ready to go off on another valuation ‘wild goose chase. The shape of the bitcoin chart is not a novelty and the history of boom and bust in markets is full of similar charts.
The direction of travel in the Bitcoin/U.S. dollar chart
There is an another chart below called dotcom bubble. Here, the big money is made getting out at the top of a bubble and back in at the bottom. As such, the watching for a market bottom is at least half of the game in investing. It is the game which is most successful investors prefer to play, rather than picking tops. Tops can be very hard to judge and are very vaporous, disappearing sometimes in moments. Bottoms are like the one we may be experiencing in bitcoin give plenty of time for consideration.
The dotcom bubble on the Nasdaq
$6,000 has been a very solid bottom for bitcoin and which shows a resilience bitcoin will not lose. The biggest risk for bitcoin is that it goes to $0 not $2,500; the real risk being that it is just the phantom asset the old school believe it is. If you don’t believe this, and I do not, then bitcoin is very cheap. The chart says the next chapter in the bitcoin story which is close. Either way the move is going to be a very big one with lots of opportunity to profit.