Has the BITCOIN Bubble Burst?

By: Joseph Russo | Fri, Dec 6, 2013
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Up an astounding 730,000% in two years, is Bitcoin a bubble? Technically and Quintessentially, YES! Imagine having acquired a modest chunk of this new digital fiat circa 2011 at an FRN price of under 0 .17 cents per unit. Each one-thousand-dollar speculation would have mushroomed into a cool 7-million. The insane parabola has clearly matured, and considering entering the speculative bitcoin arena at this stage of the game is utter lunacy. Good luck to those into it from a cost basis above the $300 FRN level.

The large 30% move down from the $1242 peak sure qualifies as the start of a bursting bubble.

If they backed this digital currency with an accompanying tangible coin I would be genuinely excited, one perhaps with a larger Silver core and smaller Gold rim. The coin illustrated on the right would be rather fitting. But noooo, instead we get the cartoon version illustrated on the left, and are bubbliciously graced with a brilliantly orchestrated modern-day version of the all too familiar fiat scheme of synthetic bubble money.

From an Elliott Wave perspective, the move down from bitcoins all time high appears corrective thus far although another leg down to fresh lows could qualify as a five-wave downward impulse despite the massive 4th wave snap back rally illustrated.

From a strict price action perspective, so long as 840.32 holds pivot low, a bullish breakout and sustained trade above the 1240 level would defend an upside price target of 1640 FRN's. Similarly in contrast, so long as 1240 holds pivot high, a bearish breakdown and sustained trade beneath the rising red trendline cites boundary to triggering a 375-pt decline toward the 500 level.

Buy Low, Sell High... That's what they say...

Perhaps another option to begin funding one's precious metals holdings is to take profits and sell some of that which is overvalued (bitcoin) in order to acquire that which is undervalued (monetary metals). I strongly suggest that anyone holding astronomical profits in bitcoin to consider liquidating at least half, and buy something TANGIBLE, and of enduring long-term value with their windfall proceeds.


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Joseph Russo

Author: Joseph Russo

Joseph Russo
Chief Editor and Technical Analyst
Elliott Wave Technology

Joseph Russo

Since the dot.com bubble, 911, and the 2002 market crash, Elliott Wave Technology's mission remains the delivery of valuable solutions-based services that empower clients to execute successful trading and investment decisions in all market environments.

Joe Russo is an entrepreneurial publisher and market analyst providing digital online media solutions designed to assist traders and investors in prudently and profitably navigating their exposure to the financial markets.

Since the official launch of his Elliott Wave Technology website in 2005, he has established an outstanding record of accomplishment, including but not limited to, ...

  • In 2005, he elicited a major long-term wealth producing nugget of guidance in suggesting strongly that members give serious consideration to apportioning 10%-20% of their net worth toward the physical acquisition of Gold (@ $400.) and Silver (@ $6.00).

  • In 2006, the (MTA) Market Technicians Association featured his article "Scaling Perceptions amid the Global Equity Boom" in their industry newsletter, "Technically Speaking."

  • On May 6 of 2007, five months prior to the market top in 2007, though still bullish at that time, he publicly warned long-term investors not to be fooled again, in "Bullish Like There's No Tomorrow."

  • On March 10 of 2008, with another 48% of downside remaining to the bottom of the great bear market of 2008-2009, in "V-for Vendetta," using the Wilshire 5000 as proxy, he publicly laid out the case for the depth and amplitude of the unfolding bear market, which marked terminal to a rather nice long-run in equity values.

  • Working extensively with EasyLanguage® programmer George Pruitt in 2010 and 2011, the author of "Building Winning Trading Systems with TradeStation," he assisted in the development of several proprietary trading systems.

  • On February 11, 2011, he publicly made available his call for a key bottom in the long bond at 117 '3/32. Within a year and half from his call, the long bond rallied in excess of 30% to new all time highs in July of 2012.

  • For the benefit of members and his general readership, he responded to widespread levels of economic and financial uncertainty in the development of Prudent Measures in 2012.

  • He publicly warned of a major top in Apple on October 26, 2012 in the very early stages of a 40% decline from its all time high.

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Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/