On January 14, 2015, Bitcoin declined as low as $170 per U.S. dollar. This comes three months after our October 7, 2014 article titled, “Bitcoin: Speculators Unite…” in which we proposed the following:
“with an increase in price from $99.81 to $1,147.25, participants should always step back and reassess the situation. The reason why is because there have been few instances where a parabolic increase in price is sustained in the form of a new plateau. With this consideration in mind, we believed that the prospects of the downside targets, dismal as they seemed at such heights, were a distinct reality.”
However, the nature of the October 7, 2014 piece implied that the price of Bitcoin was headed higher. Little did we know that the actual trajectory would be a continuation of the declining trend. Since the October 5th low, Bitcoin was only able to increase by as much as +33.66%. Ultimately, the decline that ensued since October 5th has equaled –43.23%.
Below is the Edson Gould’s Speed Resistance Lines for Bitcoin with an updated chart.
All we can say is that the worst case scenario of $125 was always a distinct possibility. A decline to the $125 level is now well within reach as the market for Bitcoin goes into panic mode.