MoonTrader

The anniversary of the bubble: is bitcoin in an uptrend?

BITSTAMP:BTCUSD   Bitcoin / Dollar
132 0 1
After my latest bearish model, I checked myself and decided to step back and take a look at the big picture. I've been nailing my trades so far, but now I find myself unsure of what is going to transpire over the next few weeks. I tend to be less pessimistic because of the volume that accompanied this apparent break of the long term downtrend.

The problem is, do we trust the linear scale, or do we tend to trust the logarhithmic scale, in which the most that got over the downtrend line is a 4h candle?

Here's my take on that: It's very simple. The significance of trendlines is that, when they are crossed, it is a sign that the market is pushing the price in the opposite direction, developing a new trend. There's no magic to the line. It's simply an indicator that strengthens the likelihood of a trend being established and breaking that line means the trend has been interrupted. When a break like this occurs on such a large time frame, it's significant no matter what scale the chart is in. In other words, even if you prefer the log scale, the break of the linear trend is still significant in that scale, so it is not meaningless. As you can see on the chart, we've since re-tested the trend line, but the point is that there's obviously been some change in the direction of the market. It may take a while longer to develop and become clear, but this creates a clearer picture of why we had that parabolic move to $454.

As for the price, I'm cautiously optimistic for the future of bitcoin , but I hope this puts recent price action into context for you. As always, be careful and don't let greed or fear disrupt your strategy. Good luck.

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