- The bitcoin Accumulation Program is a process attempting to assess and communicate the attractiveness of bitcoin’s price. Basically, we are trying to determine good times to buy or add positions in bitcoin and to help understand what is happening with the price of bitcoin on a weekly basis.
- The goal of this approach is to help make investors feel more comfortable with a long-term perspective when approaching a very volatile asset by providing a logic-based accumulation approach. Read last week’s analysis here, and for more overall information on our bitcoin Accumulation Program, watch our overview video here.
What the Indicators are Telling Us This Week
- Trend: The Trend Score (middle study, yellow) is clearly negative
- Distribution Range: bitcoin Is clearly out of the multi-year uptrend defined by the range
- Cycle: Signaling a potential bottom (bottom study, green line)
- RSI: RSI (top study, blue line) is at 24, a severely oversold condition
Chart of bitcoin ($BTC) produced by Kevin Grimes
Conclusion: Last week we concluded that while the Cycle indicates that a bottoming process could be occurring and RSI is nearly at oversold readings, the trend for bitcoin is pointing lower, appearing to accelerate. The decline indeed accelerated with bitcoin down 11% for the week and down over 30% from the peak on October 6th. We are in the process of getting a buying opportunity with bitcoin down for the year. These levels are attractive but only high risk, small position buying is appropriate considering the power of this decline. We recommend letting this bottoming process work through before putting substantial capital to work. Continue to watch and wait for a turn here as an opportunity to add positions in bitcoin.
OVERALL SCORE (1 – 7 Scale): 2 // Risk aversion favored – wait for better opportunity
read Previous Bitcoin Diaries
Important Disclosures:
This Cryptocurrency article is for informational purposes only. Past performance is not indicative of future results. Crypto is a digital currency that can be used to buy goods and services but uses an online ledger with strong cryptography (i.e., a method of protecting information and communications with codes) to secure online transactions. Unlike conventional currencies issued by a monetary authority, cryptocurrencies are generally not controlled or regulated, and their price is determined by the supply and demand of their market. Cryptocurrency is currently considered to be a speculative investment. Please Note: Investment in cryptocurrencies is subject to the potential for liquidity constraints, extreme price volatility and complete loss of principal. Moreover, you should not assume that any discussion or information contained in this document serves as the receipt of, or as a substitute for, personalized investment advice from Grimes. A copy of our current written disclosure Brochure discussing our advisory services and fees is available upon request or at www.grimesco.com.
