The Bitcoin world is in turmoil this morning as Mt.Gox, once the largest Bitcoin exchange (based in Japan) in the world, closed its website amid rumors of the biggest hacking heist of all time.
You may remember that Bitcoin was created as an alternative currency and that it took some serious programming and algorithms to create it.
This morning there were allegations that there has been a $350 million hack at Mt.Gox. Mt.Gox appears to have closed its virtual doors and may no longer be in business. Bitcoin insiders have been bracing themselves for weeks against something like this happening, but the magnitude of the virtual heist has shocked even the most astute Bitcoin observer.
This morning there are people speculating that Bitcoin (BITCOIN:BITSTAMPUSD) is the biggest scam and Ponzi scheme ever developed in the virtual world, but I am going to withhold judgment as, quite frankly, we do not know all the facts. This may be the end of Bitcoin or may be just a big bump in the road for this virtual new currency-the jury is still out.
I thought it would be interesting today to look at the Bitcoin phenomenon and see just how well it tracks and charts with the Trade Triangles. You can follow Bitcoin (BITCOIN:BITSTAMPUSD) on MarketClub and on our public website, INO.com.
Chart Legend & Technical Picture For BITSTAMPUSD (Black Numbers)
1. Classic base
2. Classic chart breakout
3. Double top
4. Uptrend line
5. Downtrend line
6. Breakout to downside
7. Trade Triangles
Generally speaking, I would say that Bitcoin and in this case BITSTAMPUSD charts extremely well. The reason I say that is because charting is only a reflection of human emotions. As you can see with the massive upward move we saw after the breakout, it created a double top and then a dramatic fall, which fell back into a Fibonacci support level. The rest of the chart numbers are pretty self explanatory and reflect classical charting methods. The key level of support for Bitcoin is going to be a close below the $500 support line. Should that happen, I suspect we would see further liquidation and a move back down to the original breakout point around $200.
Do you think Bitcoin is a scam or is it a legitimate alternate currency?