BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
I published a bitcoin             chart earlier today showing expected range of trading for bitcoin             in december being constrained within a wedge formation. This log chart expands on that idea and gives a bigger picture of my thoughts on bitcoin             .

First thing to note is the rising channel . I don't have MtGox data in this chart (which is a project for another day) but if I did there would be a very similar bullish channel coming from even further back to the genesis of bitcoin             in 2011. The biggest bubble of all, in percentage terms, does not feature in this chart as it is too long ago now .. Anyway, on log price scale the bubbles are shown in a different perspective and look more like periods of overexuberance overshooting a quite clear rising channel . So far there is still no reason to doubt that channel looks valid.

From this perspective I would also argue that the April 2013 peak is in fact part of the same larger bubble which is now deflating from the all time high in December 2013.

The last time bitcoin             languished on the bottom trendline of this channel price was at about $12 for 1 bitcoin!!! My theory is that the price is likely to languish on the bottom of that channel again but this time somewhere in the region of $285 up to $350 ish             and moving higher as time progresses. I am expecting the bottom of that channel to hold and from there eventual huge price increases to new all time highs. I've put neutral which is my medium term outlook, longer term I'm very bullish .

Incidentally I sketched in those arrows around the time bitcoin             first fell below the upper trendline of that log channel. It was just supposed to indicate my rough guess of how bitcoin             might travel to the bottom trendline . So far it has been spookily accurate!

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