What a weekend!But it's “just” a weekend and all Hodlers out there need to prepare themselves for what is to come.
I think it is important to look at the two next key prices we are fast approaching:
$1,000“$1,000 isn't cool...”
Please excuse my Justin Timberlake paraphrase but it does seem pertinent considering what a bullish weekend we have been seeing.
We have been there before and we have been well above there before also, for a significant period of time.
I don't think you would be able to find too many people on this forum – bulls and bears alike – who think that Bitcoin should be underneath $1,000 for much longer.
In fact, once we get above $1,000, we don't really ever want to go back underneath again.
Just remember this as you watch $1,000 go by while riding the train. It is a 2013 milestone – nothing to do with 2014 at all. Forget it.
+/- $1,240 (price of an ounce of gold)At the end of 2013 we just scraped the price of an ounce of gold, a very significant event and not a coincidence. This price is hugely important.
Gold has been an integral part of human culture thousands of years. It is more established than fiat currency. It holds huge psychological sway. This cannot be underestimated.
The history of gold is incredible. Few cultures have not held gold as something precious. Some of the most recognisable artefacts of ancient history are made of gold (Tutankhamen’s mask). Empires have been invaded for the sake of gold (the Incas).
Technically speaking we can of course easily get past the price of an ounce of gold. But as we go past make no mistake, it is a hugely significant event in the eyes of the world and will cause many more waves of media coverage.
Once past the price of gold we also don't ever want to see that price again. It's going to drop away.
ChinaLast and certainly not least (perhaps “most” in fact) when we move past the price of gold we also move past the top of the previous bubble, the “China bubble”, which was strongly linked to Chinese influence. For the Bitcoin community this is probably the most important early 2014 milestone. We are leading China now and don't forget it. If at some stage China goes out of the game then it makes sense to think there will be a certain effect on the market. But in an ideal world if this effect was
truly to mirror the problem China dropping out would cause Bitcoin, then the charts should really show nothing stronger than a blip. Remember this: Bitcoin has vast territory to grow into outside of China. Vast territory and myriad business and financial dimensions that are so far almost utterly untapped.
SpeedAt regular intervals this weekend we have been picking up dizzying speed. There are also signs that volume is starting to turn.
A couple of days ago I posted two charts and made some comments:
Here is the thread but I will post the charts again below
https://bitcointalk.org/index.php?topic=397534.0![](https://ip.bitcointalk.org/?u=http%3A%2F%2Fi42.tinypic.com%2Feg9zc0.jpg&t=665&c=mWfm7pvAF8TMyQ)
![](https://ip.bitcointalk.org/?u=http%3A%2F%2Fi41.tinypic.com%2Ffx5gnc.jpg&t=665&c=Sug1aQ-0AmBoaw)
It looks very much like we are preparing to break sharply upwards (towards f on top chart and red line on bottom chart) as the technical analyst Hellork proposed with a tiny 1:100 chance of happening.
A note: for all the terminology “stochastic volume”, “fib”, “wedges” and “new moons”, as soon as I read Hellork's chart and analysis I felt confident taking on the pro's stance even at his odds of 1:100. Read the other thread for my reasons but I will summarise three of them with bullet points here:
- viral growth and media coverage
- bottlenecks at exchanges building up pressure
- increasing confidence as we move out of the earliest stages of early adoption
The long and short of it is this: traditional TA
has been useful in the past and in some circumstances but right now it is often not working correctly due to the difficulty of factoring in the above bullet points and more. More than ever before it is possible for the average non-specialist to get ahead simply through their own efforts. Some time reading up, a cool head and common sense will get you as far as you need to go.
Next week is going to be interesting but one small word of warning. If we do explode upwards then it becomes more likely that at some point this may become unsustainable. In real terms this will be strongly linked to the effects of bottlenecks at the exchanges. In other words don't panic! Look for some kind of retracement to the green line* on the second chart above.
HodlingI have proposed in previous posts that Hodling is having a profound effect on the market. I also said that as it becomes possible to spend Bitcoins it would be helpful to the economy to spend some (this is in fact still Hodling – Hodling Bitcoins in the Bitcoin economy and not cashing them out).
But for the next days and weeks a straightforward cold storage option may be required. No over-excitement about reaching $1,000 again, and absolutely no wavering when sailing past the price of gold.
*Although some may find it too steep and some may find it too slow, my projected green line would take Bitcoin to a ballpark figure of around $5,000 at the end of 2014, a figure considered conservative by quite a few people. If an S-curve becomes more apparent this green line could get steeper. If there is some bad news then it could get shallower. But 99% of us (minus a few trolls
) agree it is going significantly up this year. As it keeps going volatility on the log scale is likely to keep decreasing. Don't forget this!