Many similarities between the April crash and December crash are evident at this point. It has served well as a compass when navigating this downtrend.
From a timing perspective, in April the correction took about about 3 months (87 days) to play out. Right now, we are nearing the 3 month mark since the December downtrend began.
The completion of the arch and the 3 month period also coincides with the Gox update later this week. If positive (i.e. withdrawals resuming) this should be enough to reverse the market downtrend.
If the Gox news is bad (i.e. more delays which suggest insolvency), then next support is $380-$420. Keep in mind that Gox is a isolated exchange issue and is not reflective of the fundamental prospects for Bitcoin and so I would not expect it to go lower than this.
Short term view: With lingering doubts over the solvency of Gox, I expect us to continue to bleed from here to about $550 until the Gox provides the update.
Longer term view: assuming the similarities with April continue, we can expect the volatility in BTC to drop off in the next 3 month phase with prices creeping up slowly to +$1000. Not ideal trading conditions. A wave of new startups, Bitcoin innovations and big name adopters being announced in Q3, Q4 combined with a period of stable BTC prices may provide the fuel for the next bubble pattern.
Comments
ItisCalvin
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Didn't see this chart until just now. I made a chart that backs up what you are saying. I did take a different approach and did some fib analysis along with some market cycles. I am surprised that I got about the same numbers as you regarding price. I also do think were may be nearing the bottom here really soon unless we go all the way down to around ~382 zone.
tradingview.com/v/thPPkr6h/
PW
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Nice chart and thanks for your comment. Yes, we're certainly at/near the bottom (~535), only Gox insolvency can take us to 38x zone at this IMO.
PW
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Update: the Gox announcement was very suspect. It deflected the issue of transfers to what appears to be a separate non-issue and left no updates for timelines. At best its highly unprofessional, at worst it's insolvency and until we know which the market will continue to move lower under a cloud of uncertainty. I am holding short with a target of $550 on Stamp. Will take profits approaching this price.
tradingview.com/v/thPPkr6h/