Originally published in the BullBear Analytics Weekly Report released on 12/18/2014. Partial excerpt only. Written by @AKWAnalytics.
Bitcoin has had one of its roughest weeks in quite some time as global macro events have finally bled into the price action. While catching falling knives is not what we specialize in, we do think at least a short term respite is coming as the new year approaches.
There is no doubt that bitcoin is currently in the doldrums of international financial instruments, espcecially if you were to judge progress solely by the barrage of negative press coverage this week. We have seen the return of the “bitcoin is doomed” crowd, as well as those calling for the death of bitcoin the currency but hail the blockchain as revolutionary. All of these commentaries show a lack of understanding of bitcoin itself, as well as a lack of experience in these markets.
Here is a perfect example of this: earlier this morning I was browsing /r/bitcoin for news and I saw a thread addressing the concern that bitcoin is undergoing its worst correction in its short history. This shows either ignorance or malice because all one would have to do to see if this is true or not is to GLANCE AT A CHART! When we do this, we see that the current correction is not even close to as bad as it was during the 2011-2012 slide which saw price decline from 32 $ to 2.22 $, with a flash crash down to a penny in that time period. That was a 93% decline that took place over a timespan of 6 months, and price didn’t get back to 32 $ until February 2013, over 20 months following the top. The current correction has seen a peak to trough drawdown of 76% over the course of 12 months. Historically we are just fine, and in terms of bitcoin, and commodity, bear markets in general, this one is still garden-variety. DO NOT PANIC,
Cheers,
@AKWAnalytics
BTC/USD daily chart
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