spacetrader
Long

What BTC bubble would look like now based on historic scaling

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
6872 20 157
I do not think we're in a bubble yet. Above >2000usd, be careful, This might take a while to resolve but few reasons to dip lower than lots of existing price history below $1300. Bear wolf wave target ~700 usd, largest bullish bubble target ~ 40k usd. In log scale % scale should be ~same between the channel lines, difficult to be bearish at this point. The pattern seems to repeat into cup and handles and breakouts 4 times, why not 5. Not a call, just reasonable play. Just wanted to show the long time frame channel. On smaller scale we broke out from the year long channel upward and are sitting there for several days consolidating - which seems very bullish . weekly might actually close up here too in 1 hr             . Lets see what happens. I have small 5x longs and large spot, hedge in many low cap and high cap altcoins and bitusd.
Comment:
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Well, we have entered the bubble territory. Note the candles are weekly so days of consolidations wouldn't show up on previous run ups. Div broke to the upside as suspected. I added one more diagonal level that seems to be respected to the chart. There is absolutely no way to tell how high this can go.

Fundamental brain dump:

Average and median bitcoin fees are going up rapidly as network usage increases pushing out transactions of less importance (just based on smaller fee alone, nothing else). As blockchain limits are pushed BTC cap of ~3 tx/sec is being tested while popular alternatives seem to be ltc at ~12 tx/sec and eth at ~15-25 tx/sec are increasing in fees as well and pose little advantage. Scaling solutions like segwit do little and larger solutions like lightning network, raiden, rsk+ltcp are still ways away from implementation, Probably due to lack of marketing, chains like steem (10k+ tx/sec, no fees ever) and bts (10k tx/sec, tokens, dex, pegged tokens) who dominate the daily transactions in crypto ( http://i.imgur.com/HWkc33O.png ) are largely not known. I suspect due to lack of known and accessible scaling solution in alternatives and lack of tech-stable alternatives to bitcoin it has a chance to bubble still higher. If one of the scaling solutions is implemented it could shift the dynamics of preferred choice for micropayments and scale with https://en.wikipedia.org/wiki/Metcalfe%27s_law

Long story short, anything can happen. But under premise that charts drive the news, I'm not calling tops and merely watching for lower lows, breaks in channels and trendlines to find weaknesses, and re-entering on higher lows on at least daily time frame.
Comment: Most bullish news in years:
1) ledgerx https://www.coindesk.com/start-hedging-ledgerx-begin-trading-cryptocurrency-derivatives/
2) segwit passes, enables lightning networks, drivechains, sidechains like rsk giving capability of eth + scaling lumino/ltcp, confidential transactions, mast, atomic swaps, tons more
3) SEC ruling hurts much of alternatives like eth, and eth in potential legal trouble since they ICO'ed and possibly manipulated a security. BTC not affected by securities laws as it was never sold to raise money and mined by anyone from 0 without expectation of profit.
4) btc-e downward pressure from money laundering removed
5) bcc in news seems like distraction since already clear they are just using bitcoin snapshot for their altcoin like others have and tried to do before. not sure if calling it hard fork is publicity stunt or lack of technical understanding

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Looking great
Comment: For now BTC not giving me reason to be bearish so as always I remain bullish until proven otherwise - rule of trend following. Close up channel needs to be redrawn as old ones are becoming obsolete. I am not sure BCH is as big deal as some people try to make it sound, however, exchanges addressing it are causing concern for margin traders (e.g. kraken) so I could see some affect. This is not good precedent as anyone can snapshot btc for their altcoin and cause disturbances for btc or anything else - hope this isn't a new norm. updated chart on daily:
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Comment: Segwit went live today. Lots of code that was waiting for this fix can finally go live after waiting. I expect a lot of developments really fast this month. We broke another C&H line from 2013 C&H last few days where I added to position
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Comment: We backtested the 2013 ath line with recent retrace almost perfectly, and now jumping back up, so far so good for further advance, but weekly has a bear div that has to break to allow real momentum
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Comment: I think we're possibly breaking bear div again, but has to close up here, lots of upward room left if so. I don't know how this will work with nov 16th segwit 2x (is date right?) - possibly people cashing in on split to get both coins again? very hard to say.

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Comment: I originally made this chart as a joke below $1k, but on new ath it seemed slightly plausible so I published it. Can't believe it is in top half of channel already. 30k and 60k resistances seem enormous. Just trend following for now as always.

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Solid charting and great follow-up. Thanks for your time and efforts, ST.
Reply
there is no bubble in BTC, only speculation and it will continue as long as it can !
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I am waiting btc dip from 3000 usd...and now 6000..ARRGHH! :P
+1 Reply
great contribution.
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Great work, excellent perspective.
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We all waiting btc will go up and up..and this is not good, crypto market is tricky...
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this last comment, what are u doin to me man :))))

Tnx for sharing.
Reply
Thanks space
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Great perspective that you give us here, it's nice to zoom out sometimes and ask yourself where this can go. Uncharted territories are hard to chart by definition,and ideas can only be welcome, well done!
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Thank you so much for your thorough explanation! Very helpful for a new-ish trader like myself to read your well-developed thought process.
+1 Reply
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