Bitcoin

Technical Analysis

Updated 7th May 2018

The bounce is either complete or potentially extends into the 13k area. An extension looks better in terms of Elliott waves as price action since April counts best as a 9-wave sequence.

Most of the major altcoins completed a motive wave to the downside from their all-time high already.  This implies continuation to the downside. Their wave structure during the subsequent upside bounce is mixed. Some altcoins traced impulses whereas others zig-zags. The cryptocurrency market appears to run into a non-confirmed fade-out.

The paramount trend continues to be down. Sentiment shifted from being excessively positive to hope. Market participants got reminded how fast capital can be burned. Our expanding leading diagonal remains the most likely interpretation regarding the Bitcoin. We are bearish despite further upside potential within this correction.

Fundamental Analysis

Published 26th September 2017 & amended 28th February 2018

Cryptocurrencies are in a classic bubble with all ingredients it takes right now. There is almost no fundamental value in cryptocurrencies. There are no dividends, interest, or anything similar benefits for bitcoin holders. The only fundamental benefit is to simplify payment processes for illegal activities.

Cryptocurrencies have an excessively unstable value. They are not suited at all as a mean of payment. Currency is an awfully displaced name for these instruments. We are dealing here with the purest form of speculation that the broad public encounters most likely just once in their lifetime.

Wikipedia has counted something around 1,400 altcoins around year end 2017. The mechanics of many of these instruments are exactly the same that are found in already well-known penny stock scams: The issuer is the only person long (he/she can sell) the instrument and satisfies demand from buyers. It is quite obvious that a short squeeze must occur. The bucket will be pulled further and further away from the buyer resulting in price gains. Moreover, prominent supporters are hired to „consult“ these ICO’s in return for coins. These alleged experts use their public standing to animate the broad public to invest in their supported projects. They provide short stories on how great their promoted product is. There are extraordinary similarities to a Ponzi system. It breaks down quickly as confidence erodes.

It is therefore crucial to question the statements of these experts: Why is the ICO great? What’s its use in the next two years? Is it going to create positive changes for enough people in society? What are the underlying facts to the claims?

The question is not whether the Bitcoin is a bubble but rather when will the Bitcoin bubble burst!

Technical Analysis