As an update to my ongoing harmonic analysis of BTCUSD today I see we are continuing to march our way up into the OTE short ss target ($1044) and what now appears to be a bullish ab=cd harmonic price pattern target ($1154). Last OTE long ss tag was from $685. 2:1 r/r levels have been hit on that long trade so at this point good traders should have gotten fills on their first car on an AOCO basis at around the $950 level and at this point should only be in 'runners' (2nd car) with stops at break even....Man I luv how this little monster has obeyed the natural laws of harmonics.....beautiful.....
Comments
AWatchingA
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I may be crossing a line here...However... if you are going to claim that you are a "rational analyst" as it says on your website, then I think it lowers your credibility to call btc a ponzi. Just not true on any dimension or definition of ponzi. You might just as well call gold or silver speculation a ponzi. Of course bitcoin is an experimental virtual network, "commodity" and perhaps "currency", and could collapse spontaneously, (who knows) but that does not mean that there is a ponzi with deceit and hidden agendas at work. As long as it functions, btc network has fundamental, utility value (both current and future), and that is what the market is trying to assess. If you were just claiming to be a technical analyst, I'd ignore this completely, and simply enjoy your fine technical charts. But you clearly want to be more comprehensively "rational" than that. MHO. Take it or leave it. Again thanks for posting.
CRInvestor
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Well I am up for a challenge...lol.....here is my 'fundamental' take on BitCoin...take it for what it cost you....$0.00 (and that's in Canadian dollars.....lol)...
Below is an email I sent to a cousin of mine asking what I really thought of BitCoin and it's fundamental value going forward...
"Hey Tim, so I read the pdf and watched a few vids on his site. I guess it is a bit scary when we are at the point of playing with currencies not stocks. This kind of talk is basically the hallmark of the 17.5 year 'fear' cycle peak (which is expected in Q3'17). That itself is an interesting conversation and is really just a function of money flows. Typically people have moved into commodities or 'hard' assets through these cycles....I think people think of BitCoin as one of those types of assets.
As for BitCoin itself, with such a small float (12m atm, no?) these things would have to be a million dollars a piece to be any real threat to a central bank. A 12 trillion dollar economy would need many BitCoins to be of concern. Typically bubbles develop when one sector grows to more than 35% of the entire economy. I don't think online currency transactions is anywhere near that level, so lots more room to grow .....that has lots of implication in itself (many other types of BitCoins to come, ultimate upside price targets etc) but at the moment, relatively speaking, its still a very small fish. I think the article made reference to a 12 billion dollar market cap target by one analyst. That would imply 1000/coin. Given too the big fat round number of $1000, one shouldn't be surprise that level has acted as a magnet on either side.
Where she goes from here is simply a matter of acceptance. The wind is at its back and the market is flush with cash so this thing may go and go and go. BUT While you and I may be rather computer savy, many are not and I know for certain a BitCoin will never replace a Loonie...When central bankers begin to tighten the screws (and they will) any existing bubbles like these will crash hard. GUARANTEED....How big is the online currency transactions market ultimately? I for one really don't know. You will know for sure AFTER the meltdown (post Q3'17)....but that level may be at either substantially higher or lower levels then where we are at the moment. For now it is a speculative bubble and the long term momentum is firmly pointed up. Pullbacks are to be bought as the market discovers how big global demand/acceptance really is.....
The only question I would have in a real world economy sense is, as someone who actually takes payments online, I don't understand how I come up with a price in BitCoins for a product? Am I supposed to have some algo that automatically adjusts my price based on the daily fluctuations of the currency? that just doesn't make sense....I heard the guy say in his video, I'll tip you $.40 in bitcoins....he doesn't understand, he isn't using bitcoins, he is still using US Dollars....lol"
Now with regard to my reference to ponzi schemes.....sadly, all ponzi or pyramid schemes seem perfectly legit while the scheme is underway...ALL....From NuSkin, to water filters, to real estate plays, I have seen a number of them over the years and they all have some basic value to the product but the 'value' of the proposition gets so insanely overblown that the people who come in near the end, end up getting fleased....I knew a guy who had those darn filters in his garage for like 5 years and then ended up just dumping them in the trash in the end. .....It seems to me, an asset that moves this dramatically is not moving on a fundamental value but rather on a rapid rush of demand. Since we know the supply is limited, basic economics take over. So that leads to the next question, what happens when you run out of demand? All new markets have this initial rush in but once the market runs out of buyers (and you can only stretch the rubber band so far) then what?.......The basic message here is, don't be the last one holding the proverbial bag, people used to tell me how Nortel networks couldn't stop growing revenue - ya right...lol...So that leads me to the last and only real question an 'investor' should ask, what is one of these things really worth? As I asked my cousin, how as a serious web based marketer can I possibly post a price for a product in Bitcoins if the price continues to move higher at an exponential rate It just doesn't make basic business sense to say to a customer I will only accept 1 BitCoin for this product or service, I could literally be putting myself out of business overnight. Or even worse, I might be vastly underselling myself...and all that can change on a daily basis....wtf.....As Mr. Buffet suggests, if I can't understand the basic logic behind a process (or fundamentals) then I have no business 'investing' my hard earned money into it...as a past full service broker and financial planner, I would highly recommend the same.....
Now here is where 'rational' thinking comes in if you really want to make money 'trading' something like this....first off, you have to understand, price isn't moving higher because BitCoins are actually 'worth' more (ie net assets are greater then net liabilities and that ratio is growing), it is moving higher because buyers (demand) outnumber sellers (supply)....remember mr. ponzi....As long as you can find new buyers price will keep rising. Indeed, recent 'corrections' have been on the heals of potential barriers to that demand. Once those perceived barriers were lifted, price resumed its march higher. This action implies a demand driven market and of course, as demand comes back 'online' we see new highs in price. Ironically, those wishing something like this to actually take over as a legitimate alternative to doing business in say US Dollars should not want this kind of price action....stop making new highs!!!! ........ lol ...... 'Interestingly, there will be lots of notice (if you pay attention) when to 'get out' or even when to short. As I have demonstrated, technically one can trade her all day long, but at the 'top' there will be lots of fundamental warnings too. I for one shall be watching for news of significant 'insider' selling (which ought to be interesting in this case), scandals are always good for 'tops', investor sentiment (ie my cab driver starts telling me to buy) and of course a bigger better alternative altogether. Remember that 35% of economy number. Since we know roughly when this 'fear cycle' ought to peak (Q3'17) we got lots and lots of time for all that kind of stuff to play out and man this is going to be one fun ride. Given too the velocity of this blooming 'information age' we may see prices of these 'hard asset' proxies reach staggering levels into that Euphoric manic peak...we all remember Pets.com, no???......lol
So there is my fundamental take on BitCoin....ponzi reference and all.....hope you enjoyed the read...
Brian
p.s. fwiw, its a fun trading vehicle and it is obeying harmonics so beautifully.....
AWatchingA
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Wow. Brian. Outstanding effort. Thank you! You covered a lot of territory there, and most all of your assessment I agree with. I too remember back in Nortel tech boom days - and crazy "to the moon" proclamations from seemingly sober analysts and experts. I got caught in that NASDAQ tech internet frenzy and sold way too late. Learned plenty.
I think one element I will add here is that I believe there is a a true exponential technology adoption curve underlying the price performance. The distributed, public blockchain (or equivalent) as shared store of value will almost certainly transform many industries, if not the entire financial infrastructure. Whether that software protocol will actually be Bitcoin network is anyone's guess. Of course the BTC price is almost purely speculative at the moment, but that is not any different than early investor experiences in tech start-ups in massively disruptive industries. You don't know who the winner is going to be, but you can see something big, and transformative is happening - or about to.
Anyway, I appreciate your follow-up, and certainly agree this is going to be a wild ride for the next couple of years. I also like your thoughts on anticipated topping signs. There will indeed be plenty of warning if we are paying attention.
Things do move fast in this age. Way fast...:))
CRInvestor
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glad you appreciated the effort.....Caveat emptor
AWatchingA
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Indeed.
AWatchingA
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Hey - Great charts and nice calls on BTC. I will be following your charts and check in to your site going forward. Thanks for posting!. ...