Very intriguing to find that original chart which seems to obey the real life BTC trend up to this point! When analyzing whether the current bubbly situation is overbought and how much, it should be emphasized once again that the trend rises rapidly causing misperception in the theoretical "equilibrium value" at any point in future.
Not more than a couple of weeks ago we broke the trendline uphill at $300 and now are about double the theoritical equilibrium target. However with the target rising fast it will reach $700 by Feb-March 2014 after which anything below that is undervalued.
It could be that BTC remains above the trendline for long, like it did for 17 months in late 2010 gaining a maximum of 80x ($32) the trend breakpoint ($0.4) before declining back below trend at $5 (12x break above line). [Approximate figures taken from the chart, don't unfortunately have quick access to real value points]
Just for the shits, extrapolated to the current situation a similar bubble would mean hitting $24000 /coin before crashing back to trend at $3600 in April 2015. But I suspect this time the oscillation down will likely happen much sooner as it did in May this year.
The only valid trading advice, like rpietila and others have said many times is BUY BELOW TRENDLINE and only add to your coins before hitting your final target (should be in the $10k's or $100k's). Attempting to trade coins before that almost certainly destines you to complete failure in obtaining back the coins you sold and thought you'd soon buy back cheaper. I witnessed that once again today by burning my Bitfinex winnings of the past week to where I would think the trend would turn and correct at $600. A small price to pay at this stage for the realization that thou shalt not attempt margin trading against the trend with your precious coins
.
Not more than a couple of weeks ago we broke the trendline uphill at $300 and now are about double the theoritical equilibrium target. However with the target rising fast it will reach $700 by Feb-March 2014 after which anything below that is undervalued.
It could be that BTC remains above the trendline for long, like it did for 17 months in late 2010 gaining a maximum of 80x ($32) the trend breakpoint ($0.4) before declining back below trend at $5 (12x break above line). [Approximate figures taken from the chart, don't unfortunately have quick access to real value points]
Just for the shits, extrapolated to the current situation a similar bubble would mean hitting $24000 /coin before crashing back to trend at $3600 in April 2015. But I suspect this time the oscillation down will likely happen much sooner as it did in May this year.
The only valid trading advice, like rpietila and others have said many times is BUY BELOW TRENDLINE and only add to your coins before hitting your final target (should be in the $10k's or $100k's). Attempting to trade coins before that almost certainly destines you to complete failure in obtaining back the coins you sold and thought you'd soon buy back cheaper. I witnessed that once again today by burning my Bitfinex winnings of the past week to where I would think the trend would turn and correct at $600. A small price to pay at this stage for the realization that thou shalt not attempt margin trading against the trend with your precious coins
.