Bitcoin Technically Speaking


The Bitcoin chart is seriously broken. Support level after support level has given away. Where to from here?

Technical Analysis is a tool, not a given. In downtrends, support levels break easily. In uptrends, resistance levels generally smash through to higher highs.

But if you understand the theory, TA can provide good entry and exit points while minimizing risk.

Resistance Levels

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On a one year chart, there was a long battle just under the $8,000 level.

Why do resistance levels often work? Because all those buyers at that level that are still holding are now praying to get out out. At $8,000 many will do so.

The same applies at the $5750 level or so.

There were two bounces at roughly the $3,800 level. Both have failed. The downtrend resumed. Now, the $3,800 level is resistance. At least it's weak resistance.

Unfortunately, the first chart shows that support (an area where buyers once entered) is a long ways off, approximately $1,975. That approximately a 50% haircut from here.

Bitcoin a Speculative Vehicle

Fundamentally speaking, there was no mass adoption of Bitcoin and it's highly unlikely there will be. And if not, Bitcoin will remain little more than a speculative vehicle.

Don't Confuse Bitcoin With Blockchain

It's important not to confuse blockchain with cryptocurrencies that use blockchain. While Bitcoin cannot succeed without blockchain succeeding, the converse is not true.

Blockchain can gain widespread adoption while the coin itself heads to zero.

Here's a March 2018 Flashback to ponder.

Mike "Mish" Shedlock

Comments (11)
No. 1-6

Technically speaking, exponential spikes (bubbles) deflate below the point where they started. Based on that observation, Bitcoin should bottom below the lows made in the year 2015.


It is even worse than that.

Break even "costs" to mine a Bitcoin (to pay for the electricity and cost of the equipment) is about $8,000 (in the west).

""Bitcoin currently trades essentially at the break-even cost of mining a bitcoin, currently at $8,038 based on a mining model developed by our data science team," Fundstrat's Thomas Lee said in a report Thursday."

In China with the least expensive mining operations -

"The price at which most miners would really start shutting down their operations is around $3,000 to $4,000 per bitcoin, said Fundstrat's Doctor. He pointed out that bitcoin also traded at the breakeven cost of mining in January 2015, when the cryptocurrency traded near $200."


You need new miners on a constant basis to track the public record of the blockchain of ownership. Without new miners, it all falls aparts. Miners have to confirm transactions as part of their "mining."


Bitcoin's value is ZERO as a currency.

Bitcoin's value as a speculative vehicle depends on whether there are new speculators coming to speculate and whether the old speculators still continue to speculate.


What a shitshow.


Bitcoins are a mechanism for remunerating miners for updating the blockchain. While an independent blockchain isn't dependent on bitcoins per se, they are dependent on remunerating miners. The fact that none of the coins took off as a currency is disastrous for the blockchain technology.


Don't forget to bring this up with Max Keiser next time .... right ?

Global Economics