micmuc
Long

Why the 50 weekly EMA will likely break

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
The big question for all those comparing the current bear market to the 2015 bear market is: Where are we? Point #1 or #2? Will we reject the 50 weekly EMA? Or break it?

My belief is that we are are at point nr . 2 already and will break the 50 weekly EMA upon what can essentially be called the first attempt.

Why?

A. Having the same happen as in 2015 would simply be *far* too obvious. The current (2019) 50 EMA resistance is obviously a point where a lot of short positions are newly entered by retail traders because a retrace seems so obvious based on what happened in the previous bear market. However that inherently means that the big guys can make more money by having things go up. Especially so, because those shorts provide the fuel for more than a small rally (possibly even bigger than what we saw in 2015 following the EMA break).

B. Secondly, RSI and the current fractal better resemble situation #2. RSI is high and stable and our fractal is gradually moving up, like in situation #2. RSI is a strength indicator not without reason. Many here seem to believe that high RSI is a bad sign ("because high RSI must come down at some point"), however they forget that high RSI historically precedes big rallies and that corrections and RSI declines only come later.

C. This time is different. In July 2015 (point #1) many considered the option of Bitcoin never seeing a new all-time high. There was enough fear to feed a big correction as the one that happened back then, because the prospect of an additional bull market was overall uncertain. This time (in 2019) that doesn't seem to be the case. Even the majority of bears here on TradingView that are calling for a retrace do seem to believe that a big rally will follow and that within the next few years we will see new all-time-highs. Everyone that calls for lower prices seems to be waiting for lower prices to get in themselves. No-one wants to be short when an ETF gets approved and big institutional money flows in (which eventually will happen). FOMO is bigger than FEAR.
Excellent analysis, thanks for sharing! I agree, and you said it well, that a 2015 repeat would be too obvious.

I also see a 2012 repeat as more likely than a 2015 repeat, when we had a similar situation:



This would be unexpected for many, and therefore more likely also in my opinion, than a simple 2015 repeat.
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bugbountytest FlaviusTodorius67
@bugbountytest, 2wqed2ewq
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Nice update.

I have been tracking with the BLX on a 4W chart to cut out some of the noise; but the 2 positions are similar to the question I have been pondering.
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I'll make a friendly bet with you that we are at point #1 (2015) right now- in fact, about a month ago, everyone thought we were BEFORE point #1, now I think everyone agrees that we are already at point #1, and you'll notice that Point #1 in 2015 DID break the EMA 50, but just a quick fakeout before heading back down to "test support" before heading up again- I'm pretty sure that's what we're doing now- even if you do get another burst up to say 5400-5700, BTC will need to come down to at least assure investors the bottom will hold before they go all in. If you use TD sequential in your analysis you'll see how overextended we are printing 13's/9's, daily, 3-day, weekly- A weekly 9 is pretty hairy and almost always reverses BTC in its tracks- I wait to be proven wrong of course, but I don't think I will in this particular instance. All the best bud.
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bobchen29 jeremy.jacques79
@jeremy.jacques79, first of all, nice chart and analysis, @micmuc . Secondly, I'm more leaning towards Jeremy's opinion. thanks to both of you.
+1 Reply
@bobchen29, Thanks for the "shout-out" brother, ;-)- looks like we could be right on this one.
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