BITSTAMP LTD ANNOUNCES PHASE II IN ITS DEVELOPMENT STARTING JUNE
This is merely my speculation and opinion, I personally do not think TA is very effective in predicting big news. I am simply analyzing a past event similar to what is to come in order to present a possibility of what to expect. * Disclaimer *
I am analyzing the Coinbase launch in order to gain an idea of what we might be able to see here as Litecoin rolls out onto Bitstamp this week.
First off, Coinbase has 7.5 million users (According to website), we'll assume there was roughly 6.5 million at the time of Litecoin launch. Bitstamp currently has 700,000 users according to their site. Here we can see that Coinbase was roughly 9 times larger on May 3rd (time of litecoin launch) than Bitstamp is at the time of litecoin launch. I will use a ROUGH scale of 9:1 when comparing possible price levels of coinbase LTC 1.15% launch and potential bitstamp launch price. Basically I will scale down all of my predictions by a factor of 9. And once again this is totally speculation, it is very hard to analyze the outcome of news, I am merely using historically similar data in order to derive a hypothesis.
First of all I have setup a FIB retracement from the day of launch to the peak it reached in the first half of the month. The retracement begins at a price of $15.16 and rises to ~$33. We can see that our retracement shows some nice support and resistance that is consistent with the trend. On its way up, the price of litecoin hit resistance at $26 which was 171% of its price level, it then fell about 8% and hit the resistance level at $24 before going up 16%. This trend continued until it hit its peak at $33 level. We can see the the largest price increase happened in the first 3 days of launch, this is where the steepest uptrend is and where volume increased the most. The uptrend then tapers off and continues to increase, but not without resistance on its way up.
What could this mean for Bitstamp??
Well first of all, if history repeats itself we could see a ~20% increase in price in the first three days of launch (171% / 9). I divided it by nine because of the factor mentioned in the beginning. The added volume that Bitstamp will bring will be far smaller than that of Coinbase, therefore they won't be able to influence price as drastically. So this 20% increase could put us at roughly the $36 -$42 in the first three days of launch. At this peak it will likely hit some resistance before rising a bit more to $39-$47 level. So if this trend does take action then it would be wise to hold long positions after the first dip after the initial rise because more gains are likely to come.
So basically we could be seeing something in the low $40 range in the first couple weeks of Bitstamp launch IF this trend repeats itself. Again this is news so there are a million factors to consider, but I hope this can provide some insight into the price level we might be able to expect and the trend that it will take. I could go much more in depth with some other indicators, but this paints the general idea I want to display well enough. I wanted to make this sort of as a fun depiction of what may be to come and to stimulate some discussions and what everyone else thinks, so comment and let me know what you guys think!