I report an analysis that take an historical perspective of the XBT/USD, using MtGox data for the period before the inception date of the Bitstamp exchange. The effort of this short analisys is to understand how much it’ll last the current decline in prices started 5 months ago.
I reported here all the most important past swings of this market, not always considering the absolute highs and lows but the upward and downward phases of the market which can include periods of sideways activity.
The earliest days
In 2010 the main exchange was MtGox, it opened in July but available data starts from 17 August.
Up to the first days of october the price stayed flat at $0.06 then rised significantly to $0.50 the 7 November. A correction followed with a low at $0.17 after 32 days.
The next swing carried bitcoin from 17 cents up to $1.09 (9 Feb. 2011) and again a correction, longer this time, 54 days down to 56 cents, it was april 2011.
The First wave
Everyone here probably remember the insane upswing that went from below 1$ up to 32$ of June 2011, from this top bitcoin entered a bear market that lasted 162 days, till november 2011 where it bottomed out at $1.99
From this bottom a new upswing happened up to $7.2 (8 Jan ’12) , again similar in length to the previous ones: 52 days. This market then stayed sideways for 145 days, when the first days of June a new uptrend moved bitcoin up to $15.4, in August ’12 after 77 days. For the second time in a year we have had another phase of flatness prices that lasted 139 days similar the previous one of 145 days.
The second wave
The first days of 2013 another upleg started from $13 up to $266; 97 days the longest upswing ever for bitcoin. After a period of huge volatility till July of the same year , prices stabilized at around 100-120 dollars and this consolidation ended 12 October after 185 days. So far we have had 6 consolidations with an average duration of 126 days or 158 days without considering the earliest days of bitcoin.
The last wave
This is the latest part with the solid rise from 140 dollars of October ’13 up to $1163, the bitstamp all time high done 49 days later. Since then 156 days are passed and comparing this value with past values i believe that the actual consolidation phase is coming to an end.
Eventually this correction might last as the previous one that lasted 185 days, this will project the end of the actual correction phase something around June 2014, one month from now.
Beware that this forecast doesn’t necessarily means that a new bottom will develop because as i said earlier i haven’t considered absolute bottoms in calculating the duration of all the past price consolidations; it just means that probably during next June a new uptrend will start.
Time will tell.