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2/22/2018 – Bitcoin Following Pattern from 2013 Top?

We’ve long compared Bitcoin to the late-1970s/early-1980s silver market (the chart below should look familiar to those that follow me on Twitter @jamiesaettele).  The match made a lot of sense from an ownership standpoint because both markets were highly cornered.  Highly concentrated ownership (cornered) creates the conditions necessary for a parabolic market advance (strong hands feed to weak during the mark-up)…and collapse (weak hands holding).

Bitcoin (black) and Silver late 1970s-early 1980s (red)

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The comparison to silver was extremely helpful in anticipating the blow-off and initial collapse but the extent of the BTCUSD rally from 2/6 recalls behavior following the 2013 top.

Following a parabolic advance, BTCUSD declined 67% from its late 2013 high in 18 days, recovered 78.6% of that decline in 19 days, and then resumed lower.

Following a parabolic advance, BTCUSD declined 70% from its late 2017 high in 51 days, recovered ? of that decline in 51+- days, and then ?


Bitcoin Daily (from 2013 high)

Bitcoin Daily (current)

If BTCUSD holds up, then there may be an opportunity to buy weakness in mid-March for an extension into 14415 or 16725 (61.8% and 78.6% retracements).  Those are the levels where I’d be looking for the next peak, especially if reached in late March.  3/29 is when the rally from 2/6 would consume 51 days, which is the length of time of the down sequence.  In 2013, the down and up sequences consumed roughly the same amount of time (18 and 19 days).  Stay tuned.

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