With all this non-action in the markets, why not waste some time on our favourite topic: predicting the future
My last prediction did not fare well but that was due to too much buyers suddenly entering the picture. The future, she remains fickle...
It's clear to anyone with a brain that we are in a longer term bear market. The trend is down and I see no signs that this has ended, except for increasing volume on the down turns. But that is my only signal now.
Let's look at the weekly chart:
This chart packs a lot of info so I'll break down my thoughts in snippets:
1. The stochastics is turning up again. It has a history of bigger or smaller rallies once it turns upwards from the cellar. In the last months, though, this signal has proven unreliable. No clear signal.
2. We are breaching the long term purple average. It has been breached earlier (2011 bear market; also see start of this graph) so it may happen big time again.
3. The down trend is visualized with a trend line. This trend line is currently at $350 and around $220 in August 2015. We need to punch this line, whether by rally or by going sideways, until there is a clear signal that the down trend is over. There is no guarantee that this trend will be broken before August or 2016. Price will tell, not these charts.
4. Everyone has his own thoughts on this, but my guess is that at some price point, buying pressure will prove too much to keep price within the existing down trend as displayed. It will be long before $40 in May 2017. Bitcoin is simply to powerful as idea and with too much enthusiasts to drop that low for a longer period of time. Of course, this epic bubble must be deflated (and it will) and I think it is not over yet.
5. Just as a thought, if the latest drop indicates the bottom of this bear market, we may still face sideways action that could last until May or even September before the down trend is broken. That means that those tumble weeds are called for. Keep them coming because we may still need considerable time before this bear thing is over.
6. As a final remark: $100 prices are still very much possible. That's a better place for desperation and despondency than current prices. If that's what it takes to have a better future, so be it.
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