BTCUSD: Global Support Holds; Local Trend Reverses (by May 22nd)

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar

As everyone knows, except for in the most cataclysmic of circumstances, long-term trend signal always trumps short-term fluctuations, in a stochastic dynamical system. If that rule is being violated, the reasons are likely psychosomatic.

•Empirically, there has been an exponential, global, lower bound of support buffeting Bitcoin's long-term uptrend against overall demise, (approximated in this logarithmic scaling by a GREEN↗DASHED trend-line). Over the next 2–4 weeks, it will be determined whether that support is ultimate. With only the assumption that this will indeed hold, in this chart I suggest that another major short-term crash ≤ $400 thus becomes extraordinarily unlikely —even if the local downtrend (RED↘DASHED trend-line) were to continue in the same spirit it has been occurring previously (see purple illustration and its dotted↘line companion beneath, outlining best 'worst-case' trajectory)— as there would not be sufficient time to re-establish the long-term recovery.

•Additionally, the "TIME BETWEEN LOCAL CRASHES" —apologies for the 'anchored' text element.— in this cycle has generally stayed on the order of months; thus, even if this period were shortening, assuming a consistent ratio of decay, it would take ~29 days (i.e. until 05 /10/2014) for some next hypothetical crash to occur —a purely statistical argument— which, again, would be beyond the stated recovery bound, thus I must discount that possibility under the conditions of the scenario.

•I've quoted $449 with a BLUE—BAR here to indicate an approximate convergence of the 'reversal zone' (i.e. where the right-most CYAN┊VERTICAL intersects the PURPLE↘DOWN-trend), which extends to the $400 RED━BAR line for clarity. In order to stay on target for recovery via the momentum of the aforementioned global uptrend, the downtrend must begin to show signs of local reversal somewhere within said region.

•Deflection Triangle: To help visualize the arrival of a reversal across 05 /09/2014–05/16/2014, as compared to the recent self-similar 'fractal' behavior, look for there to be a deflection away from the center of triangular region formed from the intersection of these three lines: {GREEN↗DASHED, PURPLE↘DOTTED, BLUE—BAR}, as thise would have been the otherwise expected zone of continuance on the original downtrend. By May 22nd 2014, it will be clear we are leaving the ↘ we've been in since December, marking the global uptrend to resume.

To read about my expectations for what will happen after this prediction comes to pass, see my idea entitled "EPOCH 3: A 60-Week–Long Bubblecast", (which is linked to this chart).