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Bitcoin bear market since the all time high of $1163 on 29 November 2013 may be coming to an end.



Please reference this logarithmic scale BTC/USD weekly Bitstamp price chart:

The troubling sign we take from this chart is that the $259 high of 9 April 2014 was taken out when price dipped to $152 on 13 Jan 2015. This is a new event in the history of bitcoin price and indicates the bitcoin bear market may not yet be over. Since the $152 weekly low was on very strong weekly volume many traders hoped a bottom was in place and a new advance would follow. The fact is we are still in a downtrend. If the weekly chart closes above the upper trend line now at about $290 only then would we would have one confirmation of a trend change.

However, do not forget the lower trend line which indicates we could see further downward price decline perhaps to $110. If price briefly crashed to this level on strong volume it could actually be positive for the future as weak hands would have been flushed and a double bottom would then be in place.

Often Elliott Wave Theory gives clear clues to the end of a bear market but EW analysis has been somewhat problematic during this bitcoin bear market phase. Reference to this chart published by DanV on TradingView suggests a move down to $110 would be good news:

DanV wave count indicates a terminal move down to $90 – $120 would finish the Elliott Wave ABC corrective sequence and we would then have a complete 8 wave cycle. We could then reasonably expect a new cycle to begin with five waves up making new highs, probably in 2016.

We feel bitcoin price is undervalued at present confirmed by the AlfaQuotes valuation tool based on cost of mining bitcoin.