Quick Update

What we are seeing is a contraction of volatility or daily range. In general, price expansion tends to follow periods of price contraction, like a cycle. This market like any other market alternates between periods of rest or consolidation and periods of movement. Volatility is actually more cyclical than price.

When bitcoin consolidates, buyers and sellers reach an equilibrium price level  and the trading range tends to narrow like it is happening these days; we need new information to enters the market to move it away from this equilibrium point and finding a new price area.

I think we need to wait January to see some decent fresh news capable to increase again volatility and move the price away from here, either up or down. Net Volume remains weak and there is a lack of strong buyers at the moment. For this week support is the recent $550 low, that is also the midpoint (50%) of the strong upswing from $382 to $720, resistance is around last top ($720).

I want to wish you guys a Merry Christmas and see you soon at the next update.




19 thoughts on “Quick Update

  1. Aymen

    Thank you 🙂
    I think the price would raise if it were easy for the masses to buy bitcoin.
    It was difficult for me to get bitcoins. every trade market takes weeks to verify and days to wire money.

  2. Andrea Chiavazza

    Wait, I think I know the reason for today btc price gains. It’s all the kids that are buying bitcoins with the money received from their grandma for Christmas!

    1. Jukka Santala

      Well, Enky having written resistance is around 720 dollars, the price gains were hardly surprising. In general Bitcoin has been making price-gains except when negative news bring it to panic-sells; according to back-testing the best single strategy is to buy right after bottom of every panic-sell and then sell at 15% markup (or 10% stop-loss) before the next panic-sell. Interestingly, we’ve just passed the 15% mark, so it’s about time for another panic-sell.

      I kinda hope so at least, because I sold at the first RSI sell signal on MtGox, at 710 dollars, and it topped at 750 so far and have missed the two buy opportunities so far due to computer issues… Not sure how long the upswing can continue though, I’m not sure I’ll risk buying even at daily VWAP… though, BTC speculation doesn’t seem to be for the overly cautious 🙂

      1. Jukka Santala

        Evidence doesn’t seem to be in support of that 🙂 For one thing, 710 dollars is 15% up from recent low around 610-620 on MtGox. I think markup is a dumb thing to base sell decisions, but the 15% markup has performed remarkably well historically, and might keep performing whether because it’s a level of profit at which Chinese government feels they have to take action, or because other people have noticed and take profits at 15%. But while there indeed was a small dip at 710 which prompted me to sell, MtGox continued to 850, which is whopping 36% up from the previous low. (Some adjustment may be in order due to these being peak values, I call it 15%+15% right now).

        Of course now it’s getting VWAP’ed quite hard from 830. If it was going to cross you’d think it’d crossed with that much momentum behind it, but judging from 60 minute RSI it got deflected pretty hard… But just watch, I bet it’ll prove nay-sayers wrong again and bounce over 1000 dollars tonight 🙂 Then someone will actually try to make a Bitcoin purchase, and realizes 2 hour end-to-end transactions aren’t actually viable modern day unless you’re doing something illegal, and the panic-sells begin 🙂

  3. Andrea Chiavazza

    Breaking news! at least it is for me. A new chinese exchange has come out called ‘huobi’, and from what I can see on bitcoinity.org is now trading on ridicolously high volumes, trumping btcchina. It has apparently found a way to allow customers deposits by avoiding using a corporate account, and instead using the personal bank account of the company CEO, that apparently has to personally perform all transactions. This kind of made me laugh, but also wonder for how long this will be able to go on.
    I think this is what is really behind today rally. It looks like the chinese people are desperate for bitcoins, and will do anything to get hold of them.

  4. Houbi ceo using his personal account to keep the bitcoin price up is sketchy at best. I would never trust my money in bitcoin when its on such thin ice. Houbi has insane volume now, if something goes wrong there its going to cause a dramatic fall in the price.

  5. krolls

    Enky in your opinion how would a world reserve currency reset to something else other than dollar affect price of bitcoin, if dollar devalued 30% or so this coming year. I keep hearing this could happen.

    1. Enky

      Bitcoin isn’t big enough to have some weight on the global economy. Your scenario shouldn’t affect bitcoin price ,i dont think we are going to see a 30% devaluation of usd.

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