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segeln
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January 18, 2014, 05:53:49 PM
 #41

Just like the Chinese government understands that Bitcoin is on the verge of going viral in China, and they are moving quickly to control it in a tighter way (but I believe they will allow it to continue for the foreseeable future).
that`s my Impression of the Chinese as well. If they want to "fight" the  US $ and can do it with bitcoins they will undoubtedly do it.
But I think up to now they are not so sure how to do it and they don`t understand the options of bitcoins yet.
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January 18, 2014, 07:33:06 PM
 #42

Thank you, T. Stuart, for an excellent analysis of the current situation.

I can see either an explosive growth starting in February or an acclerated downtrend thereabouts. One thing I have learned, bitcoin tends to move in myterious ways, often surprising people with violent up and down swings. You have to be prepared to go with the ride.

I appreciate the time and effort you have put into the analysis. I tip my hat to you.
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January 18, 2014, 07:43:02 PM
 #43

Thank you, T. Stuart, for an excellent analysis of the current situation.

I appreciate the time and effort you have put into the analysis. I tip my hat to you.

+1
 
It also fits quite nicely with the double exponential price rise scenario.


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T.Stuart (OP)
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January 25, 2014, 03:24:41 PM
 #44



Three weeks in...

For the past three weeks I have plotted the progression of the Bitcoin market alongside the green line trend I first proposed on 3 January 2014.

You can see the progression of the price, indicated by the yellow crosses on the chart. The red uptrend indicates a short break upwards predicted on 3 January, which subsequently happened.

As predicted, the trend has inclined sideways, essentially going horizontal for a little longer than the green trend line suggests.

Next week

In every post in this series I have re-affirmed the initial prediction that come the end of January, the price of Bitcoin will rise upwards and break through $1,000 convincingly. The progression of the market has closely followed the proposed trend, and the prediction remains unchanged.

Reason behind the current lack of upward movement

Despite the build-up of bullish good news and the recent bullish TA (19-day bullish pennant, recent Elliot Wave analysis), the price is still essentially flat after having been so for most of January. Why? The wait for Chinese New Year.

Back in December the Chinese Government told third-party payment providers to stop offering clearing services to Bitcoin exchanges. This resulted in waves of negative rumours, and many people have predicted a crash on 31 January as Chinese Bitcoiners sell all their Bitcoins and cash out at the last minute.

Your own experience

Ask yourself though, what is your experience with exchanges? If you had to cash out for some reason, and needed the money on a certain date, would you wait until this date in order to sell your Bitcoins, submit the transfer request, perhaps follow up to enquire as to the estimated time of delivery, wait as the exchange processed the transfer, and receive your money safe and sound in your bank account? Of course you wouldn't, because in the best case scenario the above series of processes can take a week to happen, and that really is a best-case scenario.

This means that if anyone in China had decided to throw in the towel and cash out, they would likely have done it already. Common sense also tells you that if the deadline for closure is 31 January, there could be a bottleneck around that date so giving extra time to cash out would be wise.

So the fact is, there is going to be no rush of Chinese people selling Bitcoins on 31 January. It would be too late. If they were going to do it, they would have done so already.

Of course even common sense is not enough to convince many nervous people outside China that the Chinese will dump their coins on 31 January, so that's why many are waiting on the sidelines, ready to buy as the price crashes to the low hundreds.

This is pure fantasy. The people waiting will not get the half-price coins they want.

Reasons behind the current lack of downward movement

The price of Bitcoin is supported at current levels because market sentiment has never been so positive. The daily bullish news count is very high. It is becoming crystal clear now that the ground-breaking technology that is Bitcoin has the power to streamline global payments saving enormous sums of money and time in the process. Depending on how you look at it (and also depending on correct education about it, which is starting to happen in the mainstream now) Bitcoin is also:

- a beautifully simple (as wallets are also fast becoming!) and secure digital currency.

- an extremely profitable, attractive and convenient asset.

- a digital bearer instrument that safeguards users' information from other users.

And there is so much more to come.

Not only is it obvious that Bitcoin has an important place in the world, but the rate at which it is possible for Bitcoin to be adopted is staggering. Bitcoin has come along at a time when the Internet has become sufficiently established so as to be able to support and sustain extreme viral effects. Together with the fact that it is open source (removing huge obstacles that would be present with copyrighted software) and combined with the network effect – the more users Bitcoin has the more valuable it becomes (not only in terms of price but also in myriad ways to do with its use as a payments system, a currency, an asset, etc.)  – this viral support is giving Bitcoin the opportunity to expand exponentially.

Investors with any experience know very well that it is now just a matter of being patient. As Bitcoin expands to fulfil even just a small part of its full potential, their investment will increase in value at a rate that out-performs anything else they could put their money into.

Waiting for the bargain of a lifetime

Bears have been consistently confounded throughout the consolidation that began on 7 January. With every red candle the forum has been awash with claims of “low hundreds”, FUD of all kinds and outright screaming and swearing. Hosts of newbie accounts have sprung up, spouting negative views.

Those waiting for cheap coins have been on the attack, and when all else has failed the conspiracy theories have exploded into life. It seems like the preferred course of action for some is to claim massive market manipulation, rather than simply to admit that their repeated claims for a capitulation into the low hundreds have not been proven correct, and that they are wrong.

Those waiting for cheap coins simply cannot accept the simple, common sense logic that says “If market sentiment is more positive, the price will be supported at higher levels”. But if they can't accept common sense then they need only look at previous “bubbles”. As time has progressed and confidence in Bitcoin has grown, price levels after each bubble have been consistently higher in proportion to the lows, highs and follow up prices of earlier bubbles. This is perfectly normal and of course to be expected for as long as confidence keeps growing. And, needless to say, confidence has received the biggest boost in the history of Bitcoin over the past three months.

Why the price will move up through $1,000 in a few days' time

As 31 January approaches and those waiting on the sidelines with the money that has been building up, see that the China doomsday crash they so desperately hope for is not materialising, acceptance of Bitcoin's current supported price will be the only option left to them. And with that acceptance will come the realisation that the time to invest is now, before the continued rise of Bitcoin that everyone expects this year kicks back into action as the bullish steam that has been building up is released.

By this time next weekend the sideways movement that has drawn Bitcoin out for 19 days so far will have come to an end. The uptrend will have been resumed, indicated roughly by the yellow line added to this week's chart.




                                                                               
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segeln
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January 25, 2014, 04:43:32 PM
 #45

@ T.Stuart
though I am a bull like you and therefore biased I appreciate your thoughts.
Difficult to argue against
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January 25, 2014, 04:59:55 PM
 #46

This means that if anyone in China had decided to throw in the towel and cash out, they would likely have done it already. Common sense also tells you that if the deadline for closure is 31 January, there could be a bottleneck around that date so giving extra time to cash out would be wise.

So the fact is, there is going to be no rush of Chinese people selling Bitcoins on 31 January. It would be too late. If they were going to do it, they would have done so already.

I disagree, the cutoff for 3rd party payment systems to deal with bitcoin exchanges is on the 31st, but it doesn't mean people cannot cash out on the 31st even if processing the payment to their account takes a few more days after that. It is very reasonable to expect a dip anywhere from Jan 28th - Feb 2nd and that is what I expect. People in China cashing out, people outside of China panicking and cashing out as well, and then those manipulators waiting a few days after the 31st to cash out on people getting in who thought the chinese new years storm was over.


Waiting for the bargain of a lifetime

Bears have been consistently confounded throughout the consolidation that began on 7 January. With every red candle the forum has been awash with claims of “low hundreds”, FUD of all kinds and outright screaming and swearing. Hosts of newbie accounts have sprung up, spouting negative views.

Those waiting for cheap coins have been on the attack, and when all else has failed the conspiracy theories have exploded into life. It seems like the preferred course of action for some is to claim massive market manipulation, rather than simply to admit that their repeated claims for a capitulation into the low hundreds have not been proven correct, and that they are wrong.

Those waiting for cheap coins simply cannot accept the simple, common sense logic that says “If market sentiment is more positive, the price will be supported at higher levels”. But if they can't accept common sense then they need only look at previous “bubbles”. As time has progressed and confidence in Bitcoin has grown, price levels after each bubble have been consistently higher in proportion to the lows, highs and follow up prices of earlier bubbles. This is perfectly normal and of course to be expected for as long as confidence keeps growing. And, needless to say, confidence has received the biggest boost in the history of Bitcoin over the past three months.

Why the price will move up through $1,000 in a few days' time

As 31 January approaches and those waiting on the sidelines with the money that has been building up, see that the China doomsday crash they so desperately hope for is not materialising, acceptance of Bitcoin's current supported price will be the only option left to them. And with that acceptance will come the realisation that the time to invest is now, before the continued rise of Bitcoin that everyone expects this year kicks back into action as the bullish steam that has been building up is released.

By this time next weekend the sideways movement that has drawn Bitcoin out for 19 days so far will have come to an end. The uptrend will have been resumed, indicated roughly by the yellow line added to this week's chart.

Agree that each bubble takes us to a higher level compared to previous lows, and it's only a matter of time for the next bubble. But I do not think this will happen as soon as we think. I'm expecting to see a sideways motion for all of February as well... just because the China FUD will be over after the 31st (for now, but I can guarantee you they will bring more problems) doesn't mean the price will shoot up again. There is no reason for there to be another bubble right now, there are a lot of big hopes and plans for 2014, but nothing in the near horizon. I can see Feb being just as dull, if not worse, as Jan. Yes we've gotten a lot of bullish news that will help bitcoin in the long run, but these giants like Tiger Direct and Overstock are dumping enormous amounts of coins back into the market which is not helping the price right now for the short term. This will be overcome eventually when more and more people buy and use bitcoin.


But for the next month or two... I am still expecting a sideways movement, even if we break 1000 in Feb or March, I seriously doubt we will reach our ATH anytime in Feb or March unless something big happens.




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segeln
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January 25, 2014, 05:11:04 PM
 #47

But for the next month or two... I am still expecting a sideways movement, even if we break 1000 in Feb or March, I seriously doubt we will reach our ATH anytime in Feb or March unless something big happens.
in stockmarkets lateral movements last only few weeks,so I think in the dynamic bitcoinmarket the lat-movement does not take that Long  as you were assuming.
But the best of these lat-movements is : the prevailing prior trend will mostly be continued
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January 25, 2014, 05:18:04 PM
 #48

But for the next month or two... I am still expecting a sideways movement, even if we break 1000 in Feb or March, I seriously doubt we will reach our ATH anytime in Feb or March unless something big happens.
in stockmarkets lateral movements last only few weeks,so I think in the dynamic bitcoinmarket the lat-movement does not take that Long  as you were assuming.
But the best of these lat-movements is : the prevailing prior trend will mostly be continued


We've been through a 6 month lateral movement during 2011/2012 (if i remember correctly), I don't see any reason why this couldn't happen again. I'm thinking we're getting set to break the record of the longest lateral movement we have ever had in bitcoin. The adoption rate is increasing a lot faster now, but then again the money needed to cause another rally/bubble is a lot higher than before.




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segeln
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January 25, 2014, 05:26:09 PM
 #49


We've been through a 6 month lateral movement during 2011/2012 (if i remember correctly), I don't see any reason why this couldn't happen again.
I do not think the time period 2011/2012 is representative for BTC-Market.
It started end 2012/beginning 2013
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January 26, 2014, 11:20:32 AM
 #50


We've been through a 6 month lateral movement during 2011/2012 (if i remember correctly), I don't see any reason why this couldn't happen again.
I do not think the time period 2011/2012 is representative for BTC-Market.
It started end 2012/beginning 2013

I think Bitcoin is in a totally different situation now than it was in 2011/2012.

Aside from the fact that businesses worldwide are just beginning to become educated about the very real benefits that adopting Bitcoin can have for them, there is a whole new crowd of people with interest in Bitcoin as an asset, not just from a private perspective but from a business perspective as well (Second Market, Winklevoss ETF, etc.).

                                                                               
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.◆ ◆ ◆ ONE TOKEN TO MOVE ANYTHING ANYWHERE ◆ ◆ ◆.
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