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Recent events have rallied bitcoin, spiking the cryptocurrency more than 20%. As the Iran/U.S. situation cools, so does the bitcoin price.

Its easy to predict various scenarios on the basis of pure speculation, but that kind of guessing is hard to turn into reliably profitable positions.

Bitcoin (BTC) is still in a bear trend. This might be hard to believe because the price has been so strong but Bull and Bear markets are easy to understand when you have the key. This is the key:

Price movements during a bull trend and a bear trend

Bear markets spike up and slide down, bull markets slide up and slump down. As such the recent rally is in a bear market trend.

Here is the master chart for bitcoin:

The master chart for Bitcoin

The recent high is bang on the trend top of the current bear market. You can see this trend extended by me below, in a previous analysis drawn up before Christmas 2019. (You can see the price on the day on the right axis label.) These predictions have panned out pretty well.

The Bitcoin trend before Christmas

And again in December:

The trend in December

This bear trend is still securely in place. However, I think its fair to say charts do not predict the unknown, unknowns. Trends are just ranges of price created by volatility and that volatility in this bear phase is fairly constant. This bear channel defines the range of prices that the current state of the markets can give bitcoin depending on what events come out of the soup of unresolved situations. Iran, China, Hong Kong, North Korea are all factors as are others and their possible impact and their probabilities are rolled into todays price and its historical range.

But what next? Time looks to be running out on this Bear.

The bear trend may be running out

2020 is going to have plenty of general volatility and this will push bitcoin upwards. This will come as a function of the presidential election, with all the global political trolls trying to get their leverage on in the run-up. Then there is thehalvening.

If BTC breaks out of this bear channel it will fly. It wont take much.

Meanwhile, Bitcoin Bulls should dollar cost average in. Bitcoin is a instrument where if you dont know which way it going, you should steer clear of it because one thing is certain whichever direction it goes, its going to be a wild ride and unless you are very sure of your position, you will get shaken out.

Meanwhile, my eyes are onHong Kong. Once the U.S./China trade deal (Part 1) is signed the gloves may well come off in China. Big trouble in Hong Kong will certainly spike BTC.

Clem Chambers is the CEO of private investors websiteADVFN.com, author of 101 Ways to Pick Stock Market Winners and Trading Cryptocurrencies: A Beginners Guide and the 2018 winner of Journalist of the Year in the Business Market Commentary category in the State Street U.K. Institutional Press Award.

Continue reading here:
Bitcoin: The Next Level - Forbes