Originally published in a Bitcoin BullBear Market Update on 10/22/2014. Partial excerpt only. Written by @AKWAnalytics.
Bitcoin has been trapped between 349 $ and 397 $ for weeks as market participants grapple with an unresolved bottom at 275 $ in a medium term bear market. There are many similarities between Summer ‘13 and now, however the technicals must confirm this instinct.
We stated last week that the current rally off of the 275 $ low was reminiscent of the action in the Spring of this year that took prices up to 683 $. The more we watch the price action, the more we think it is actually more similar to Summer ‘13 prior to the breakout above 260 $. We didn’t really see this much stability following the Spring 339 $ bottom, which led to an unsustainable rally. This time feels more hesitant, which is good for the bulls (climb the wall of worry).
With a relatively stable bitcoin price at the time being, we have had some extra time to ponder other markets. Our first observation is that the divergence between gold and silver is indicative of a shift in perception of both: gold to a strictly monetary metal (not insurance or ornamental), while silver to industrial. Obviously a turn lower in global growth would hurt an industrial metal, however it is not as clear what the effects would be on a monetary metal (hence the outperformance). It will be interesting to see what materialized in the coming weeks.
Cheers,
@AKWAnalytics
BTC/USD daily chart
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