Simply wanted to point out something historically with exponential moving averages in the 2-Day Time Frame to show how we might not fall below the 200-EMA in the 2-Day Time Frame DURING A LONG TERM BULL TREND.
the only problem I have with this, is what crossed them (white over the green) ahead of this new (green over white) cross?.. the big drop when coronavirus happened in March, so one could argue that this could be just an outlier and not the start of some new super cycle..
otherwise, it's a nice analysis
WyckoffMode
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@Hskr8,
I understand your point. However, the Red RSI in the 3-Week was not above 50 back in February/March when the White Energy was falling in the 3-Week time frame.
Also, the White Energy in the 2-Month Time Frame had just fallen below 50% level in January, 2020 and continued falling February/March, 2020.
I can understand your opinion of this potentially being another outlier.
Much Respect....
Stay Awesome!
David
BrentEdward
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@WyckoffMode, Thanks for the reply David. Good Luck!
Interesting indicators, very detailed, thanks for sharing mate.
Would it it however not be a more severe drop this time then the last one?
Many longs from 3k still open and the new bag holders are bigger money.
It is also worth mention the somehow unnoticed billionaire that are claiming he is about to put 50% of his wealth in bitcoin, but shortly in the end admitting he has bags of btc from 300$ area.
sub 8800 would trigger the 400DSMA to turn bearish and that would confirm an extended bear market (what my ta indicates)
We would then very likely test the 500D rainbow bottom at low 4k.
QUOTE: "Many longs from 3k still open and the new bag holders are bigger money."
RESPONSE: If you think about it; if the Composite Groups were to drop it down lower than the previous drop, would that not allow more "long" positions to be opened again and the exchanges be in an even worse predicament than they are presently? Yes, that would end up being the case. If that were the argument for a deeper drop the next time, the same argument could be presented again and again for it to drop even lower again and again.
Exchanges that allow margin (leverage) trading of crypto have made a terrible mistake. What mistake would that be? Allowing more short positions than long positions or allowing more long positions than short positions. When the SEC approved for the CME to allow Bitcoin Futures trading, they made it MANDATORY there MUST ALWAYS be an equal number of short versus long contracts. WHY? To avoid placing the CME into a predicament of being held liable for paying off positions with money they do not have. There should always be opposing margin positions of equal number and equal leverage to pay off the winning position with funds from the losing position. Unfortunately, unregulated crypto exchanges have not implemented this fundamental safeguard in order to prevent unregulated crypto exchanges from being liable for paying off winning positions with money it does not have.
My concern is the following: It's highly likely most every unregulated crypto exchange that allows margin trading has been margin trading against its own members on their exchange in an effort to cheat their own members to load up their own crypto walletss. Most all of these crypto margin exchanges have coordinated with one another to move the spot price of cryptos in a way that benefits themselves against the majority of members with open margin positions.
If you really think about it, unregulated crypto exchanges that allow margin trading are basically putting themselves in a position of having to margin trade AGAINST its own members to TRY to avoid paying off winning positions with their own exchange funds. Why? Because the unregulated crypto exchanges are not using the same rules applied by the SEC to the CME Bitcoin Futures Trading to avoid having to avoid having to pay off winning positions with their own exchange funds. There should ALWAYS be the same number of opposing positions to avoid this predicament to keep the exchange from becoming insolvent.
Not sure if you knew this but ALL cryptos traded on crypto exchanges are DERIVATIVES of crypto WHILE the actual cryptos are stored in cold and hot wallets. What's even worse is most exchanges are likely creating more DERIVATIVES of cryptos than they actually have in their cold and hot wallets. It’s even more likely that unregulated crypto exchanges that allow margin trading are creating “more” DERIVATIVES of crypto than they hold in cold and hot wallets. Why is it “more likely” for unregulated crypto exchanges allowing margin trading on their exchange to create more DERIVATIVES of crypto than they hold in cold and hot wallets? Because they will likely create more DERIVATIVES of those cryptos to dump in the spot market in an effort to liquidate margin longs. They will also create DERIVATIVES of USD TETHER to buy (pump) cryptos in an effort to liquidate margin shorts. They do this not only to satisfy their own financial gain but to avoid having to pay off wining margin bets that were NOT EQUALLY OFFSET WITH AN OPPOSING MARGIN POSITION WITH THE SAME LEVERAGE.
Now the unregulated crypto margin exchanges are finding they have created a ticking time bomb. How so?
1. They have MAJOR banks on their exchange accumulating crypto and IMMEDIATELY taking that crypto off exchange after they accumulate it. This is slowly depleting the amount of cryptos they have in their cold wallets. Meaning, they will eventually get to a point in which they will no longer have enough crypto to fulfill withdrawal requests. If you ever see an exchange “claim” a particular crypto cannot be withdrawn due to “maintenance” on their wallet; this is likely a sign the exchange does not have the crypto available in their cold wallet to fulfill withdrawal requests.
2. This brings us to another predicament: Exchanges are transferring USD Tether to other USD Tether exchanges to buy crypto and transfer it back to their own exchange to fulfill withdrawal requests. You can bet exchanges using USD Tether are monitoring accounts that transfer USD Tether and withdraw other cryptos after purchasing with USD Tether. We may see a time in the near future in which a major exchange (other than BitFinex) ceases all USD Tether deposits. The moment you see an exchange make that statement, it would be a good idea not to have much crypto at all on that exchange. Because that would be a sign the exchange is concerned about too much crypto being taken from its hot and cold wallets. Which also means it is aware of the fraud occurring and possibly involved in said fraud.
3. As previously mentioned in number 1. Large Interests; such as Gray Scale, Large Banks, Central Banks, etc… are accumulating crypto in record amounts in a slow methodical manner. Large Banks and Central Banks have an advantage because they can create all the USD they wish out of thin air to purchase crypto. Which means Large Interests are placing pressure on crypto exchanges by accumulating crypto
otherwise, it's a nice analysis