The Market Direction Prediction I've pointed above (SHORT) sums up this post in one word, but don't short just yet!
When approaching such a rare looking chart, we as traders, try to find similar looking behavior in the past, that could maybe tell us something about the future.
Problem is there's not many.
Putting as many indicators and analysis techniques simply won't help in grasping the real forces driving this digital currency. One thing for sure, any commodity that looks like this ended up in crashing, period. Maybe not tomorrow, maybe not even the next year, the price will eventually be a lot less than what we see today.
Taking for example the 2000 bubble, a lot of voices where heard about the irrational prices at which stocks were trading, and these voices where right, problem is that one cannot simply short such a chart, because chances are that it will continue to be irrational, pushing prices up as if this coin will replace all the currencies used today.
So how should we act? I know it's heart breaking to miss such a good party but this time you don't want to be anywhere close, for the simple reason that bubbles end up by bursting.
Another reason why Bitcoin cannot sustain its gain is simple. The Bitcoin should behave as a currency, an agreed system in order to buy and sell goods. When such a currency appreciates continuously, there's no incentive in using that currency since people are profiting from the simple state of NOT using it. The outcome is that no one will really use Bitcoin to buy and sell goods, a behavior which reinforces the "bubbly" aspect of that digital coin. End of story.
When approaching such a rare looking chart, we as traders, try to find similar looking behavior in the past, that could maybe tell us something about the future.
Problem is there's not many.
Putting as many indicators and analysis techniques simply won't help in grasping the real forces driving this digital currency. One thing for sure, any commodity that looks like this ended up in crashing, period. Maybe not tomorrow, maybe not even the next year, the price will eventually be a lot less than what we see today.
Taking for example the 2000 bubble, a lot of voices where heard about the irrational prices at which stocks were trading, and these voices where right, problem is that one cannot simply short such a chart, because chances are that it will continue to be irrational, pushing prices up as if this coin will replace all the currencies used today.
So how should we act? I know it's heart breaking to miss such a good party but this time you don't want to be anywhere close, for the simple reason that bubbles end up by bursting.
Another reason why Bitcoin cannot sustain its gain is simple. The Bitcoin should behave as a currency, an agreed system in order to buy and sell goods. When such a currency appreciates continuously, there's no incentive in using that currency since people are profiting from the simple state of NOT using it. The outcome is that no one will really use Bitcoin to buy and sell goods, a behavior which reinforces the "bubbly" aspect of that digital coin. End of story.