The problem with coming up with a value of bitcoin is how can you arrive at one? As its critics point out, there is no intrinsic value. There are no future cash flows to discount, like a stock, because there are no cash flows at all.

One way is to come up with the cost of extraction — just as for a metal like gold or silver — using the cost of electricity and the associated computing costs required to mine a bitcoin. Another is to come up with an estimate of the global “anti-fiat” market, arriving at a market share, and then working backward.

But a third way would be through technical analysis, which involves trying to discern patterns in the charts of price and volume. Like bitcoin itself, technical analysis can be waved away as some hocus pocus that only has value because people think it has value. But if you believe in the world of Fibonacci retracement and Bollinger Bands, read on.

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