Bitcoin: Range Favors Long Term Bull?

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
Bitcoin update: The lack of activity continues and when it will stop NO ONE knows. There is a series of lower highs and lower lows on the more immediate time frames but this condition hardly qualifies as a worthwhile trend. Especially since the current price is basically in between the two range extremes: 4100 high and 3K low. Until it takes out one of these levels decisively, we will only play it from the position trade perspective. Any shorter time frame is not worth the effort and cost involved.

When I refer to NO ONE, I am referring to the retail traders and all of the gurus who advise them. The people who know when Bitcoin is going to break one way or the other are the insiders. The current market is perfect for broad and quiet accumulation while preparing for a news event in the pipe line. I would imagine that large players like Coinbase, or others in the same league have a much better idea as to when important news will spike this market. Just like the Cannabis stocks went out of favor and right back in favor within a couple of months (starting with Cramer’s interview of Cannabis CEOs about a month ago). Before the positive news brought the herd rushing back into those stocks, the charts were ugly, and offered no clues toward the impressive rally that followed ( CGC went from 25 to 50). This same type of effect is what will bring the herd rushing back into Bitcoin in my opinion.

This is why we keep telling our followers that there are two ways to play this market: accumulate a small amount, and WAIT it out. The second way is to WAIT for the spike, let it play out and then look for continuation pattern opportunities. Notice both methods involve WAITING (which no one likes). The first scenario obviously involves more risk because this market can drift much lower.

Even though price is setting up to go lower over the short term, that does not mean the market is in a trend. A break below the 3400 level can lead to a push into the 3200’s. Why isn’t that a trend? The answer is 3200 is NOT a new low. Bitcoin has been as low as 3122 and IF that level breaks, it then has to contend with the 3K psychological support. The chances of a failed low or double bottom formation developing in such areas are very high. This is why jumping in with shorts and expecting 2K or whatever else the herd is betting on is such a high risk. Also people do not consider the amount of time and attention required to trade the short term moves. One mistake can make the whole effort fruitless.

Also keep in mind, the broader reward/risk favors the long side. None of the alt coins have broken away from Bitcoin’s control. They all still follow the leader which makes them just a cheaper extension of this market when it comes to risk. That means if Bitcoin is going to remain at the forefront of blockchain, at some point it is more likely to attract more buyers rather than more people looking to get out. One of the reasons why it doesn’t move like it used to is because many of the reactive and “loose” players have been shaken out. Without new money, there is very little liquidity to profit from. You think you are going to profit from the smart money?

In summary, when a market becomes out of play, hated or forgotten, that is usually when long term opportunity is prevalent (but far from obvious). The typical trader or investor gets excited when a market is pushing highs, and is on the forefront of the news. And that is when professionals take the opportunity to unload their inventory (Cannabis stocks are perfect example). The best thing to do in this environment is focus on the big picture, not the short term hype or over exaggerated reactions. Whether you are holding inventory or looking for shorter term trades, WAITING is the most effective action you can take. The worst thing you can do is force trades and get caught up in the gambling mentality which is very easy to do when you lack experience.

Until Bitcoin pushes a major support or resistance, lack of follow through will be common. Avoid the noise by either staying out completely or accumulating some inventory (if you don’t have any). There is no need to be big, and there is no need to be overly invested in the alts. It’s all the same market at this point. If you want action, it is pretty much everywhere else but here, just keep it on the radar. When this market returns to a more favorable situation, it will happen fast, and you may miss the initial move, but isn’t it better to have capital waiting on the sidelines rather than having to make it back from all the losses incurred from the gambling mentality?
Marc Principato, CMT |Author: Analyze Any Financial Market Like The Pros Using Price Action| | Cofounder (S.C.)

I do not update my analysis often because usually there is no reason to but today there is a reason. As I wrote in this article and as we have been repeating over and over, this market is not going to go anywhere until a significant news catalyst catches the market by surprise. And that catalyst came out today with the SEC saying "eventually" a Bitcoin ETF will be approved. Just like Cramer squeezed the cannabis stocks a month ago that lead to a significant rally, this Bitcoin news is similar. This is when patience AND experience pays off because we still have our capital base intact to continue investing and trading (into an improving environment). Our Bitcoin and recent Litecoin trade ideas both hit their targets as a result of this move. Like any other outsider, we had no idea this news was going to squeeze the market today, BUT we were positioned for the possibility and as an outsider THAT is the best we can do.

On a more technical note: price has taken out the previous week's high which is a very bullish sign. Based on this we will now be looking for continuation patterns for swing trade opportunities. IF this move is a fake (anything can happen) then the confirmation will be expressed as a deep pull back into the middle of the range (3400 area) or a break below this week's low. If that scenario unfolds, we will simply continue to monitor in a more neutral stance. Now if you will excuse me, I am going to troll other analyst's forums. Oh wait, I almost forgot, I adhere to a professional code of conduct.
+2 Reply
ReallyMe MarcPMarkets
@MarcPMarkets, As many news and announcements before, this one is no different. A flash in the pan, if you ask me.
On a more technical note: It is unlikely that the crypto market unfolds in even motive waves endlessly. We've had 3 bigger motive waves in a row (2011, 2013, 2017), a bigger corrective wave is overdue.
And I think we are in the middle of it. It will continue go down for quite a while before it goes up again.
+2 Reply
BTCUSD H4 Correction up. Checkout the idea detail's and all the update's for the complete picture.

BTCUSD D1 Long Term EW Analysis. Checkout the idea detail's and all the update's for the complete picture.
Thanks Marc. This range truthfully favors sideways trading only on the long term. We are most likely in for a strong consolidation in the coming months:

Note: By "NO ONE" he means himself. That's how it works, you project on others what is on your mind.
BarclayJames alanmasters
@alanmasters, ....knows (with absolute certainty).
+1 Reply
IrenaLouis BarclayJames
@BarclayJames, Did they recently put up a troll sign here?
+2 Reply
MarcPMarkets IrenaLouis
@IrenaLouis, yes. I am a troll magnet. Hehe but at least I attract the "higher profile" type.
+2 Reply
IrenaLouis MarcPMarkets
@MarcPMarkets, Ha! there's a world of difference between an open forum of intellectual dialogue & a troll~box, rest assured they haven't caught on yet ... =)
MarcPMarkets BarclayJames
@BarclayJames, hehe wait, are you trying to say he doesn't know either? I guess I am going to have to unfollow him. Again.
+2 Reply
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