From an
interview with FOFOA:
Most people who expect a catastrophic loss of confidence in the dollar seem to think it will begin in the financial markets, like a stock market crash or a Treasury auction failure or something like that. But I think it is more likely to come from where, as I like to say, the rubber meets the road. And here I'm talking about what connects the monetary world to the physical world: prices. I think these "worlds" are connected in two ways. The first is the general price level of goods and services and the second is the price of gold. If one of these two connections is broken by a failure to deliver the real-world items at the financial-system prices, then we suddenly have a real problem with the monetary side. So I think it will be a relatively quick and catastrophic event, but maybe not as dramatic as a major stock market crash. It will be confusing to most of the pundits as to what it really means, so it will take a little while for reality to sink in.
What happened with Bitcoin earlier this month is identical to the pattern in gold: a breakout move that starts to attract fresh interest from a wider demographic which is then muted through a sharp price drop. This keeps anyone who doesn't understand the underlying structure and fundamentals out of the game, allowing a continuing
stable move toward appropriate valuation. In other words, price discovery is occurring in stages.
There's still a lack of recognition regarding the long term Bitcoin potential from the FO/FO/A camp, though. It's almost like cypherdoc is the Bitcoin side that FOFOA dismisses, and FOFOA is the gold side that cypherdoc dismisses.
As for Bitcoin's direction, the trading volume has tumbled to lows seen that preceded exchange price rises every time since the $5 level broke in May. Amateur and momentum traders are probably waiting for the a trigger rather than buying the dips. I'd say it's almost time to be ready for resumption of the measured, steady rise. Since the beginning of June, there's been a nearly perfect and stable 30-45 degree rise on the daily and weekly charts. With little sign of demand destruction aside from what happened during the spike above $9, the most likely direction is up.
Since early 2012, major volatility has subsided. So from late May, my gameplan has shifted to accumulation on daily declines in price (just like with gold) that are correlated with low volume, which all happen to have been weekends. Every time so far has been rewarded beautifully with an average cost now of about $5.85 per BTC from 11 signals over the past several weeks, including yesterday. Now that steady growth does seem to be the future course (with infrequent jumps in volatility), I think this strategy should run successfully for quite a while.
The following charts show the weekly and daily patterns:
Note that there was a sell trigger on the 21st and a buy on the 22nd at the daily level, but not the weekly.
