It seemed like it was just yesterday that I was making a post about bitcoin reaching parity with gold (somewhere's in the $1,150 ~ 1,250 range, IIRC), now it's nearly twice gold's value ($1,258 per ounce * 2 = $2516, compared to $2,455 per bitcoin on Coinbase as I type this)!!
and one more !, for good measure :)
What to Do from Here? Sell the House to Buy Bitcoin? Sell the Bitcoin to Buy a House?
Um....
...well...
...dur...
I can't really give you a solid answer on this at the moment, because, as experienced as I am at using technical analysis (TA), most of my experience is with stocks that may double over the course of years, not with assets that double their value in less than 3 months and have people paying over $400 premiums to get their hands on some.
Bitcoin is looking a bit parabolic of late (just look at the zoomed out daily chart of Bitcoin and see for yourself -- chart #1), which is an absolute asinine condition to try to call tops and especially to try to short the market. With all the above in mind, I do have a few planned "take profit" prices in mind, based on TA, shown on chart #2, below.
Chart #1: Daily BTCUSD (Bitstamp)
https://www.tradingview.com/x/EX8AOCah/
Chart #2: Daily BTCUSD (Bitstamp) -- Logical Prices to "Lock-In Profits"
https://www.tradingview.com/x/p7457OMj/
Usefulness of Fibonacci-extensions When Price is in "Uncharted Territory"
Because Bitcoin is trading in uncharted territory, above all price highs of the past (with the exception of the most recent high that just came in hours ago -- showing up as a small "wick" on the most current daily candle), there aren't too many reliable methods to predict future price pivot levels...that is, with the exception of Fibonacci-extensions and perhaps classical pivots (which I won't go into here).
Fibonacci-retracements are useful for determining possible pivot levels within a price correction to a major price swing. We find that prices often correct to between the 38.2% and 61.8% retracement level of the last major price swing before pivoting into a new price swing (for this reason, both 38.2% and 61.8% are considered significant Fibonacci-retracement levels).
Fibonacci-extensions (fib extensions) are equally useful for capturing high probability pivots beyond the range of the price swing. As it turns out, price will put in at least a temporary pivot, but often strong reversal (correction), between the 138% and 161.8% levels of a price swing, making them logical profit targets. Doubles of price swings (200% moves) are also reliable as profit targets, for the same reason (high odds of becoming a price pivot).
Analyzing Profit Targets Using Fib Extensions
In chart# 2, I determined the two profit target area(s) by considering the fib extensions from the last major price swing. I calculated two fibs extensions using the same high, but two different lows. Any price levels that stand out as obvious pivot prices are valid to use as an "anchor" (as the 0% point of the fibs extension tool). I chose to consider them both just to get an idea for how much of a profit target range they produce on their significant fibs extension levels.
The theory is if the 161.8% level of the price swing using the higher lower doesn't "stop price advancement", then the 161.8% level using the lower low might, as both are valid and expected to act as resistance to price.
Just in case you can't decipher it from the above chart, the first target area (for Bitstamp) is $2,509 to 2,594 (might as well call it $2,500 to 2,600) and the second target area is $2,890 to 3,029 (or $2,900 to 3,000).
I Wouldn't Bet my House on it!
Like I said earlier, it's difficult to predict price pivots when price goes exponential. I would suggest only to use this type of TA to determine prices to take profits on a pre-determined percentage of your total BTC position, or all of it, if you're comfortable not holding any BTC (in which case, you have FAR less problems with FOMO than do I ;).
In my case, I might take like 5 ~ 10% off of the table at the first profit area and another 10 ~ 15% at the next.
So, Now that Bitcoin has Well Surpassed Gold in Value...
What's next?
Will we soon be buying house and property with a single bitcoin? Will we be purchasing fancy yachts and Hollywood hills mansions with fractions of a bitcoin?
What do you think?