Yesterday was a big day in the bitcoin space. In the wake of Hearn’s damning essay at the end of last week, the bitcoin price staged one of its sharpest declines of the year, and bottomed out around $350 flat – a level not seen since the beginning of December last year. A couple of days of consolidation, during which the bitcoin price traded essentially flat between a very tight range, brought us to yesterday afternoon. Across this period our analyses compared this range bound action to the coiling we often see in more traditional financial asset markets – a coiling that generally precedes a sharp breakout in one direction or the other. Why? Because the bulls and bears are at loggerheads for so long that it builds up a residual pressure, and when the range breaks, this pressure (be it buy or sell) forces volatility. More often than not these breaks require a fundamental catalyst – one impactful enough to shift sentiment to favor one direction or the other.
Yesterday afternoon, we got the fundamental catalyst, the breakout and the sharp move we were expecting. The catalyst came in the form of a report from China that covered the conclusions