Time is running out

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.





18 thoughts on “Time is running out

  1. litebtc

    I only wish I knew back in 2010 about BTC…would’ve been insanely rich even with a mediocre 100$ investment and without trading the waves…just holding…

  2. Elie

    I have to give it to you Enky, this one has a tough bottom to call on. Still unsure where between 380, 365 or 340 the bottom will be before we start our way upwards in June 2014.. tough call. Still gonna be patient and keep watching before jumping in. Also we do want to miss the boat up!

    1. Elie

      BREAKINGS NEWS: BTCChina halts CNY deposits from Bank of China (05/06)

      [Weibo | Twitter]
      Friends, due to policy reasons, we will halt deposits from Bank of China. If you have any questions, please call our customer service hotline: 400-664-3033 or contact us through our business QQ 400664303

      Folks as more news like this appear (seeing the BTCCHINA statement) i believe we will go definitely down and retest in the next 2-48 hours the last old low of 380 and if panic permits maybe even 340 (crossing fingers for 340). But definitely as more news come in in the next hours and days we might go lower, the last drop before the end of this Chinese bear and the beginning of Bitcoin resurrection (June 2014 rally/cycle)

    2. Arthur

      Hats off to you Elie, you are always so fast with this news, awesome! And fully agree, this is the type of news we need, to have bitcoin explore lower grounds. It hit 420, but didn’t break through yet. Previously I called it the 430-460 zone, but instead I should have called it the 420-460 zone (5% up and down from 440). When that zone is broken, 380 is the next station to arrive. The sooner and faster that happens, 340 comes within reach.

      Anyway, I’m gonna keep my eyes peeled on my mobile to check the developments today and tomorrow!

    3. Arthur

      More China news. I have to say, markets are not moving much on the China news lately. Probably lots of it is priced in already, I guess?


      (On a sidenote, I had to laugh when I read this in the comments somewhere:

      “Consumer demand is virtually zero and the price is based on speculation and future expectations. This reality will bring the price to under $40 by the end of this year. Look at the price chart.”)

      1. Enky

        the probability to go under 40$ by year end is around 1% (3 sigma event or 99% probability to don’t happen)

        3 sigma’ is a statistical rule which dictates that for a normal distribution, almost all values fall within 3 standard deviations of the mean value. It is also known as the empirical rule or the ’68-95-99.7′ rule

  3. Arthur

    Quality post again Enky, thanks! Although this timeframe gives enough room for an ‘ultimate’ low around 266, I’m still not convinced we will go there. It needs another Mt Gox to go bankrupt, or several Chinese exchanges more to discontinue their operations to make the 200’s happen. And I just don’t see those things happen anytime soon. So for the moment I’ll leave my remaining bets on 370-390 where they are.

  4. A Coinfiend


    Seeing the number of days associated with these cycles, I am reminded of the Pareto principle, of which I’m sure you are familiar since you are both Italian and a trader 🙂 80% of the time we’ve spent in this down-cycle was necessitated by the 20% of time the market was bombarded by negative news. In my mind, we had a little over a month of bad news cycles in the Bitcoin space. If we said for example that number was 37 days, the cycle (following the 80/20 principle) would be 185 days. This cycle, along with your analysis, confirms a “gut feeling” I’ve had about this market for a long time, that it will start to firm up in June. Thanks as always for the excellent analysis!

    1. Enky

      Yes i know Pareto principle,It fits well here. It could be bearish also May, we need something big in june to win the inertia of this bear market.

  5. Mike

    Excellent analysis, Enky. The similarities in the lengths of these waves is uncanny. It says a lot about human nature, to seek for patterns, which is also reflective of the entire natural realm. I’m curious since you have been around for the past several years watching Bitcoin in action, from its infancy, adolescence and into a young adult, so to speak, have there always been some major news at the beginning of new up trends? Or was it the technicals that has led with people seeking explanations?

    1. Enky

      No single major news especially for the earliest days, neither the day of the low in november 2011 at 2$.
      I remember just some media attention that overall ignited the various rallies from 0.5 to 32, from 13 to 266 and from 130 to 1200.

    1. Arthur

      Yup. Previous 2 cycles lasted 7 weeks and 5.5 weeks between false recovery top, and lowest point. The false recovery top for this cycle was on April 16, so we should see the lowest point somewhere in the second half of May.

      We might tend to think nothing happens, but remember, last week we were on 465. This week saw the 420’s several times again, and a pretty weak recovery to 452, after which the 430’s were found again quickly. It might look small signals, but to me they contribute to the bearish trend.

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