Regardless of whether or not Bitcoin's price rises to 1300 or even 1400, I will remain short. The most important divergence is not to be found in the or but people's widespread (yet fragile) exuberance. Importantly, yesterday we experienced what I believe will be our final piece of major news. But expectations did not meet reality - if anything, black Friday was a reminder of just how little utility Bitcoin really has. It is still just a financial instrument - not a viable currency. This was reflected in the price which failed to reach substantial new highs, and did so on relatively low . One of the most important gauges of market strength lies lies in how it reacts to news. When the highly negative academic report on Bitcoin garnered widespread media coverage the price continued to rise (I believe this was sub-$400). In our case, it is the presence of major news and its failure to impact price that acts as a major signal of a market top.
It is my view that the market is awaiting a catalyst before the bears take control. In April, that catalyst was a DDOS on Gox. Whatever the catalyst is - I'll be watching.
I believe that Bitcoin will follow a long-term trend for which Elegy has provided an excellent chart . Be mindful of the hysteria we currently find ourselves in when estimating the fundamental significance of Bitcoin.
Generally however I believe that markets are organic and non-deterministic so I dislike offering too precise a target. In the short term I believe we are about to see the final gasp of this bubble. My reasons are many and I envision multiple scenarios occurring rather than one in the singular. Importantly - all of them end in a reversal.