Is Bitcoin getting ready for another run-up?
If you have been following bitcoin for the last few years, you probably noticed that public attention has turned away from it lately. To be precise since bitcoin hit $1000 late 2013, the buzz surrounding the crypto-currency has steadily declined hand-in-hand with the price that collapsed more than 80% in 2014. To get a grasp of the change of public-interest in the topic, let’s look at how often people searched for bitcoin on Google!
Weekly chart of the NYSE Bitcoin Index (source:freestockcharts.com)
If we look at the price action in 2015, it looks consistent with the development of a price-base that, according to technical analysis, can serve as a support zone for further advance. I have indicated prior bases with gray rectangles on the chart. As you can see, breakouts from those bases lead to explosive bullish moves before. The 200-day Moving Average is also turning up signaling a possible uptrend initiation.
Without trying to predict the future, the current situation in the bitcoin market might be a great entry point for long-term positions. BTC could be bought as protection against the global devaluation of currencies conducted by central banks and governments. Investors should still keep the higher-than-average volatility of the crypto-currency in mind when sizing their positions.
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