BTCUSD update: Not much action since the massive short squeeze recently. There is very little to go by in terms of market structure and timing and why we have be on the side lines WAITING. Those who do not know any better continue to trade and only feed the herd, while we prepare for the high probability move.
The Tether situation has created a layer of uncertainty that cannot be evaluated from a chart. We have been watching the spread between Bitfinex and Coinbase as one of our determiners of the internal health of this market. The fact that the spread has been narrowing is a bullish sign by our evaluation.
There have been conspiracy theories about Tether since its inception. Very similar to the conspiracy dramas that attract a lot of attention toward the Gold and Silver markets (for YEARS).
We can sit here and argue about insignificant facts and figures, but the bottom line is this: it is in the best interest of the exchanges involved to resolve any instability created by Tether, perceived or real. There is too much transaction revenue at stake alone to let something like this unravel.
The other thing to remember is: these markets have NO REGULATION. That means very large players (Like Goldman Sachs) can employ age old techniques to accumulate coins at attractive prices. Especially in these markets where ignorance runs high.
Doing things like engineering large sell offs to shake out the weak and lure to inexperienced. Trolls like to complain about this sort of thing. We simply recognize it, and consider it when evaluating price action and levels. So far the sharp pull back from the 6700 area to 6100 appears to be in line with this consideration.
Since the Tether situation has contributed to the widening spread between Bitfinex and Coinbase, we put more credibility into the Coinbase chart (it is backed by Dollars). When this situation resolves itself, we will go back to Bitfinex charts.
With that being said, the Coinbase chart is demonstrating a much healthier formation. We are looking for a particular swing trade long setup to capitalize on the possibility of a shallow higher low. A sharp close above the bearish trend line will serve as confirmation. What makes this situation unique is the range expansion the occurred previously.
If price cannot rally from there, we are then looking for support around the lower 6K region. So far the psychological level itself has been in place for MONTHS.
In summary, high probability opportunities in this market are INFREQUENT. People who do not understand that are still wrapped up in the bad habits that were reinforced during the "easy bull market" where everyone was right no matter what.
This persistent range bound environment is what exposes those who do not have enough experience to adjust. A positive performance comes from avoiding losses as much as it does from generating profits.
This is mostly achieved through WAITING when the market shows NO REASON TO TRADE. Patience saves money, costs nothing and is not hard to comprehend. Knowing how to apply it is where the value comes from and this is a function of psychology, NOT a chart formation. Just something to think about.
It is a good thing we have altcoins booming while Bitcoin goes sideways, easy to earn while we wait.
PeacefulWarrior
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Cycles
BTC_SA
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Here's my view on the Tether problems right now:
Tether being sold off steadily for a few weeks is something to be worried about. Most of it wasn't being used to buy BTC or we would have seen some big volume and an uptrend on Bitfinex before that big spike last week. So large amounts of real USD have probably left the crypto space over the last few weeks, unless for some reason, the same money is being used to buy BTC OTC.
That's why I think we had those large drops in BTC price after the previous Tether selloffs. When real USD leaves the market, everyone is left playing for a piece of a smaller pie, although it's not obvious that the pie is smaller right away because of the way Tether value influences the BTC price.
Previous Tether selloffs and subsequent BTC selloffs:
MarcPMarkets
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@BTC_SA, interesting perspective and thank you for sharing. I just think the whole Tether conspiracy is a technique to shake out more ignorant participants, or lure them into shorts. It is something that Bitfinex and the other large players in the space have the ability to control and resolve. They have way too much to lose, not to mention the more recent institutions getting involved. My opinion means nothing in the eyes of the market, that is why I go by the structures. And right now, I see strength.
BTC_SA
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@MarcPMarkets, Here's a bit more of a close-up view of Feb vs now which I posted elsewhere:
I think the market is in for a big shakeup. More Tether analysis:
The last time we had large Tether moves was in Jan/Feb. Main thing to note here is that BTC started dropping after the Tether selloffs/devaluation. From 12K to 9k and then 9k to 6k.
What we've got now is a much larger Tether move but just a few hundred dollar BTC move afterwards. Large amounts of money has been moved and/or has left the market and we are yet to see the effect on the BTC/crypto prices.