Category Archives: Bitcoin

Bitcoin short term future

So, will the Bitcoin move up or down?

It’s hard to tell. Some claim the down trend is over while others are mocking the optimism and say the down trend pressure will continue until the end of January 2014.

btc-dn

Many discuss the news coming from China, trying to analyze if it’s really as bad as people say it is. This is difficult because of the language barrier. If you’re a chinese speaker, please write in the comment section what is really being said, preferably with links to chinese web sites.

Here are two disagreeing charts, one with a strong up trend and another with a strong down trend. They were both taken from MtGox data a few minutes ago.

Can you tell why this total disagreement and confusion in the discussion?

Before looking at the trend in the chart, you must make it a habit to look at the axes. The time axis at the bottom is very important.

In the First chart, you see that the time range is of a few days. This is not enough (in my opinion) to get a meaningful idea about the probable future of the trend.

At least we can see that the down trend continues for a few days now.

On the other chart, you can see that the time range is much smaller, it is less than one hour actually.
btc-up
I heard some people are happy with this picture and believe the worst is behind us. This is too short sighted, the down trend might resume in a few hours or days. No one can be sure this is the final bottom.

Sometimes, when you’re trying to convince yourself this is the end of the down trend, you will actually buy at the top (temporary top) and will suffer losses as the down trend resumes.

In the long run, 5 years and above, I’m extremely bullish on Bitcoin. My plan hasn’t changed, I’m putting a same $ amount into bitcoin each month so if it is cheaper, I get more bitcoins for my dollars.

I try not to play the short term trading game, I’m just not too good at it.

When I do spot unusual scenarios I write about them and take action, but only with a small part of my investment.

I really wish there was a way to invest in options on BTCUSD and when I say options, I mean plain vanilla options, like stock options, not binary options – that’s a big no-no in my book.

Things will get interesting when options exchanges will offer those kind of product but I guess it will take time for that to materialize.

Meanwhile, I’m back to finding great stock option opportunities. Read more about it here.