A lot has been happening with Bitcoin over the last few months particularly in December and one of those things was the large price swings that has seen the bears do all they can to scramble to call the bottom while the bulls did their best to scramble for the top. To regular bitcoin investors though, such price swings are not really a surprise as bitcoin is known to be really volatile which means large price swings are a common occurrence that takes place frequently.
Nevertheless, in December, something happened with bitcoin. In fact, when I logged into my Twitter feed, I saw a lot of people going into a Chicken little frenzy, screaming on top of their lungs that the sky was falling. I didn’t panic though because I understand that in every market, there are three kinds of people, bulls, bears and pigs and often, when something scary takes place as what happened in December, pigs are always the first to cry out as what happened in December but that’s a story for another day.
You may be asking what people where crying about, well the bitcoin price took a dive and it wasn’t minor. It was a huge retractment that saw the overall price of Bitcoin dropping to below $13000 per coin from an initial $19000, yes, I know, that is scary as hell but like I had said, when it comes to bitcoin, volatility is not really something new. Which is why I said bitcoin is not really for the fainthearted. While some people where screaming, “Bubble burst” more bullish and optimistic investors were actually buying and now that the price is on a rebound, I bet, they will definitely be smiling all the way to the bank.
However, if you study the bitcoin charts, particularly those from the last few months of last year, you will notice that the overall market have been trapped stuck within a single particular range. A look at this range showed that the bounces of the range have been decreasing not only in price but in the average monthly trading volume. But before you go into panic mode, you have to appreciate that there is nothing really wrong about these bounces because they are the once that can give us an accurate hint on where the actual tend is headed.
If you ask most technical and fundamental analysts, they will tell you with positive certainty that the trend being taken by the bitcoin certainly represents what may be referred to as a “Bear Pennant.” Although this analysis might be right, it isn’t really neutral. The bitcoin trend has actually been forming a symmetrical triangle and symmetrical triangles are not usually indicative of the particular direction, they can only tell the price. And from the trend, the analysis that can be taken out is that is the bitcoin is going to undergo a breakout, it’s like going to either move to above $20000 but not cross the $22000 mark or move below $10000 but won’t cross the $7000 mark.