LunaticTrader

Investing with the Moon

Posts Tagged ‘ethereum’

The bitcoin boom

Posted by Danny on May 9, 2017

Stocks keep trading with a positive bias and major indexes are reaching new all time highs. Our LT wave for May suggests some weakness is up next. We will find out soon. Here is the current S&P chart:

^SP500 (Daily) 7_28_2015 - 5_8_2017

The S&P exceeded its March 1 high yesterday, but it didn’t manage to stay above the 2400 resistance level. It may push through in the coming days, but if that doesn’t happen it will start to look like a failed breakout and that would probably trigger some selling.
The Earl indicator (blue line) has turned down, but the slower Earl2 (orange line) is still headed higher. This can go either way. A continued rally would probably target 2500 where it would test the upper boundary of the blue trend channel. A pullback could give us a revisit of 2300 for a test of the lower boundary.
I am short term neutral until we get more clarity.

Bitcoin is getting a lot of buzz recently as it keeps climbing to new record highs. I try to do a post about bitcoin once a year, so this a good opportunity for an update. I have been quite lucky with my calls on the crypto currencies. I went bearish on bitcoin in December 2013, just weeks before it peaked above $1000. In my second article I called for bitcoins to drop as low as $180, which came true a year later. And in my most recent post in October 2015 I gave a long term buy signal for bitcoin and also tipped ethereum. Ethereum has indeed grown into a strong contender in this space. You could pick up ETH for less than $1 when I wrote my piece and it traded just below $100 in the recent weeks. That’s a nice 100-fold increase in less than 2 years.
So, what’s next for bitcoin? Here is a long term chart:

bitcoin

Bitcoin has been climbing in a nice trend channel since 2015. BTC trades above $1700 as of today, so it looks like it’s going to test the upper boundary of the channel. A breakout above $1900 is possible and would start a blow-off phase like in 2013. But that remains to be seen.
On the downside, the $1000-1200 zone is major support that must be held. A drop below that zone would tell us that newer crypto currencies (possibly ethereum) are taking over, just like Google took over from Yahoo at some point. I still think that most altcoins will go to zero once a crypto currency becomes the clear winner in terms of linking real value and services within its coin.
The next upside targets for bitcoin remain at $2457 and $4246.

Posted in Financial Astrology, Market Commentary | Tagged: , | Leave a Comment »

Bitcoin wakes up

Posted by Danny on October 26, 2015

The market kept climbing last week and didn’t stop for any of the resistance levels we had expected. It’s also not bothering about the current lunar red period. What’s going on?
Maybe we are seeing the first positive red period in almost a year. And that would be an indication that the market is starting another leg higher in its multi-year bull market. It will be more clear by the end of the week. Let’s have a look at the S&P 500 (click image to enlarge it):

S&P 500

The S&P is back within the range it held from February until August. The next major overhead resistance is now at 2100-2130. The Earl (blue line) has dropped a bit but appears to turn back up. We could be going to a bearish divergence in this indicator. The slower Earl2 (orange line) is still going up but getting very high. This looks like a market that is more than ready for a pause, so I don’t think there is much upside left at this point.

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Bitcoin quietly gave a weekly buy signal in our weekly reversal levels a few weeks ago. In my previous articles on bitcoin I was rather bearish: What will replace bitcoin? and Bitcoin price targets, but now could be a good time to turn bullish. Here is a long term icebergs chart for bitcoin (click image to enlarge it):

bitcoin

For the first time since late 2013 we see some significant bullish energy (green) enter the picture. In 2013 the rallies ended in massive overheating (red lava) followed by major corrections. My downside target of $180 was reached earlier this year and a nice base has formed just above $200.
A very long period of “floating ice” has just ended and bitcoin is slowly heading higher. How high can it go? I don’t know, but with this chart $500+ is certainly not out of the question.

As I wrote in 2013, the value of a crypto-currency will start to depend on real intrinsic value that becomes tied to it in some way. It is now clear that this can also be the value of services that are being connected to blockchain technology. This is starting to happen with Bitcoin and also with newer implementations like Ethereum.

Danny

Posted in Financial Astrology, Market Commentary | Tagged: , , , | 4 Comments »

 
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