Hey guys. I've reported on BrotherJohnF (youtube silver analyst, one could call him), who has recently reactivated his BitcoinChannel on youtube and also now setup a related blog and forum published in his latest
Bitcoin Report Video a very interesting technical analysis using the Accumulation/Distribution Indicator.
I took the time to transcribe the relevant parts of the 25 minute video. BrotherJohn shows the bitcoincharts roughly as follows while explaining things and I'll insert [] info on what he points to at the relevant places (emphasis mine for easier speed-reading)
This is the Bitcoin Chart from bitcoincharts.com. I'm going to spend some time in this Episode to talk about Bitcoin seignorage but before we get to that I wanna do some technical analysis on the chart.
This is the lifetime chart of Bitcoin. You can see we started off at infinitesimal.. one cent or so and the runup to 30 plus, so that is a 3000-fold gain. It's still a spectacular gain, we're still at a thousand plus gain on the Bitcoin, so that's a very very large gain for the early adopters.
Now the question is going to become very important: how much accumulation and distribution has gone on since the early adopters came on and I think you'll see when we look down below it's actually been quite a bit.
The first indicator we have below here is the Volume. You can see this volume spike here [points to mid-November 2011 spike] of nearly 400,000 Bitcoins; that's going to be the equivalent of 4 Million Dollars at current prices or roughly a quarter of the market cap - I'm not sure what it is, the total is going to be 21 million, I think we're about halfway there. So neraly half the market cap turned over, and not nearly as much turned over when we had this big smack-down [points to 2011 crash] from the 32 price all the way down to the 2.50 dollars.
So there's a lot of volume that has come in, I will call this "accumulation". This is new buyers and a diversified base of new buyers coming in. The same sort of thing is happening recently.
Now you can see that on the next indicator: This is the "Accumulation Distribution Index". So you can see that this downtrend here [points to post-bubble downtrend], very very long downtrend from 32 down to 3, a good 90% decline in the price was accompanied by this decline [points to same timeframe on Acc/Dist Index indicator] in Accumulation and Distribution. So there was a large distribution at this point and then began the Accumulation with this gigantic buy spike [points to the 400K spike again].
Now what's interesting about this now is that you can see here at about May or so [points to May 2012 on Acc/dist index], actually June, we had a breakout in new highs in Accumulation. That did not at all correspond with a breakout into new prices [points to only slight increase in May/June 2012 on price chart], you can see new price highs were far far from them at around 6 or so with the accumulation breaking out.
So what does that mean, you can see we're kind of levelling off here [points to July through now on Acc/Dist indicator] at a very very high level of accumulation. It can mean a couple of things. The first thing is that the distribution of the base of the people who are accumulating Bitcoin is becoming much much broader and that may very well be the case. Or it can be the case as some have speculated and we will see that when we look at the story from teodesian that perhaps bitcoin has been infiltrated and it is being sold off on a slow rate. Now I've contended for a long time that if the Bitcoin is hacked, then the price will collapse to zero. That's not necessarily the case if it were hacked by a very very intelligent group of people. They could dilute the price over a period of time as the base grows. So this anomaly could be pointing to that. If this anomaly does not resolve itself either in a large crash in this chart [points to Acc/Dist chart] or a very large breakout in this chart [point to price chart] then tedesians theory may be true.
He then discusses Bitcoin seignorage and that weird teodesian article called "a hologram of a cryptocurrency". (question: is teodesian == molyneux?)
and says towards at end of the vid:
we are not seeing a price rise, we are seeing a rolling over here. But the last chart is very important and that's going to be the MACD and you can see we're actually negative and turn positive [points to current time on MACD indicator]. So this is going to be the first time since about this time here [point to price chart at mid February 2012] around 5 when we've crossed from negative into positive [points to MACD]. So if all this holds and if the bitcoin story is true and if Teodesian is wrong and the Bitcoin isn't the "hologram of a cryptocurrency" but is actually a true cryptocurrency then we will expect to see fairly soon a breakout into this price and a rise above 15 dollars.
And we'll talk to you next time.
So what do you guys think? Bitcoin silently hacked OR bitcoin > $15 soon ;>
