On December 18, 2013, we said the following of Bitcoin (found here):
“…in the last 24 hours, Bitcoin has declined as low as $455. This suggests there there could be a significant appreciation from the current level as the conservative downside target has been achieved.”
The rise in Bitcoin from the low of $455 by +123% in less that one month seemed substantial enough. However, the recent declines in Bitcoin require us to reassess the potential risks and rewards going forward.
In the last few days, Bitcoin has experienced extreme volatility in its price when it fell -32.7% from the intermediate peak experienced on January 5, 2014 at $1,015. We’re now faced with the potential for Bitcoin to achieve the ascending downside target of $412.65 (now at approximately $570) followed by the worst case level of $200 (ascending red line).
In many previous examples of Edson Gould’s Speed Resistance Lines, once at the extreme downside target of $412.65, the price usually reverses to the upside. However, failure to do so (reverse at or above the extreme downside target) would mean that Bitcoin could reach $385 before reversing to the upside. If the $385 level fails on the downside then $200 is assured.
Finally, the extreme upside target is $1,606.95 and the conservative upside target is $1,071.30. These upside targets are only valid if the price of Bitcoin is on the rise above the $412.65 ascending line.
***Anyone venturing into the world of Bitcoin for the purposes of speculation should assume that all funds put forth will be lost.