Nov 10, Dec 20, Jan back to 10

BTCUSD, Daily 

Is that the arrow head, “V-shaped” top many were looking for? The volatility of Bitcoin continues. November 27 2017 it broke through $9,000 for the first time, only a day later it was over $10,000 and the psychological high was in.  The much anticipated selling never occurred,  and on it rallied to $15,000 by December 7 and with the Futures market opening on December 10 Bitcoin peaked (for now) on December 18 as the CBOE opened for trading at $19,400.  With exchanges around the world demanding significant premiums many investors were paying over $20,000 for each Bitcoin.  Only nineteen trading days later and we have traded back under $10,000 today, a near 50% decline from Decembers high.

As technical analysts it is a very difficult call but clearly the sellers are in charge and with the volume of Futures contracts still very low, the classic GREED followed by FEAR has cornered the market.  The only clear support and resistance are the top of $19,400 and the November 25/26 weekend gap from $8320-9460 which look like it needs to be filled.

For me it really is the Winter of 1999/2000 all over again, and the Dotcom boom, only more so.  The best performing share on the London Stock Exchange in 1999 was a small Israeli technology company called Geo-Interactive. Its shares had rocketed from 0.22 GBP to 35.00 GBP in under a year (a 7,200 percent rise) which propelled the start up to the brink of the FTSE and the UK100.  However, during March 2000 the share price collapsed back falling below 6.00 GBP.  I know this because I was one of those invested in the frenzy of the time in at 1.30 GBP  and then again at 1.60 GBP,  selling during the March meltdown at what i thought was 26.00 GBP.  However, by the time the Broker answered the phone, (no internet or on-line dealing in those days)  and placed the ordered the price had dropped over 5.00 GBP and I was filled at 21.50 GBP – I still have the deal tickets to this day.

Bitcoin rose over 18,000 percent during 2017. The markets repeat themselves day in day out, year in year out.  Everything has changed since March 2000 and nothing has changed. Markets are driven by people, people are driven by emotions.

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Stuart Cowell

Senior Market Analyst


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