Yolos
Long

December Bitcoin Prediction

OKCOIN:BTCCNY   Bitcoin / Chinese Yuan
In November, the bitcoin market had a surge of volatility because of a huge short squeeze that caused the price to go up about 50%. This, along with several other technical signals, suggests to me that bitcoin may be transitioning into an uptrend. Since the lows in the upper 200s in October, we have had a series of higher lows and some higher highs as well. Currently, bitcoin is in a symmetric triangle consolidation, as shown by the orange boundaries. I think bitcoin will break up through this triangle towards strong resistance at 2520. Should we break through this resistance level, i think the uptrend is confirmed and we will retest the highs in november. $450 is an important resistance level because the unleveraged exchanges (stamp and btc-e) made their highs around there, and it was an old resistance level from the middle of the downtrend.

The auction of 50k bitcoin may create some interesting market dynamics for the month of December, regarding the market expectations of miners concerning supply and demand. Should there be overwhelming demand from the auction, miners may find that demand was higher than they expected, and now don't have enough coins to satiate the general market demand. I think they may have sold many of their bitcoin upon receiving the news of the auction, thinking that this extra supply would hinder their ability to make a profit from the coins they were currently holding, and also to lock in profits to avoid the risk of holding them when this extra supply enters the market. This could have had an effect to artificially lower the price for the past few weeks. If it plays out like this, the lack of supply will help fuel the potential uptrend.
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