Bitcoin - Does any of this ring a bell... again

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
Hello there, it's Mackerel Mike.

Before I crack on I just want to walk you through what I just did. If you read my last update then you'll recall I opened a short to scalp a little, stop loss got hit and it was a sad time. Since then I reopened and caught the small drop with a bit of leverage a minute ago so it's fine I’m over it.

Then I noticed something, I saw we hadn't dropped far at all and judging by the volume it seemed like someone must have found some spare change and a few beer bottle tops down the back of the sofa and decided to buy the dip... hmm I thought to myself, this is odd. I then did 3 things, I looked at the charts for Bitcoin Shorts, then I glanced at Bitcoin Longs... then I closed my short.

If that was an alt, I wouldn't touch it with a pole.

Now look at longs -

I'm interested...

Now before I go further I will say that I’m really perplexed by this bizarre bull vs. bear thing we've got going on, where if someone claims it's going up then they're a wishful child and if they say it's going down to far then they're literally the Grinch (Before his heart grew 3 sizes, obviously).

It's a bit strange to think in polarized view when really all any of us can do is put forward cases on what is going to happen next. So with that in mind, please direct your eyes to the similarities I have stuck arrows next to on the daily chart ... this is making me feel very uneasy with how well this fits into a possible play. I agree I think we need to go lower, but as we can see there was first a short squeeze before dropping again, looked a bit bearish before suddenly deciding on destroying every over leveredged short on the planet. I don't think I need to walk through each indicator and why it's significant but I would especially like to point to the drop off in volume .

Whether you are bearish or bullish over the next month, one thing is for sure that we can expect a bounce. Now when we look at those indicators throwing of some mixed cross road signals and then take a look at the weekly chart, I become a bit biased of what direction that will be in...

Here's now -

Here is 2014 - which you cannot try and argue was not a more aggressive correction than we have seen so far...

Note the drop off of volume , the difference between now and 2014 is I’d bet a lot on there being a lot more money waiting to enter the market than there was back then. We have seen today how tiny amounts of volume can move the market; now imagine what a chain reaction could be set of if there was a sudden increase.

The final thing I just wanted to round off with was to take note of the thinning of the cloud at the end our triangle, now this of course changes nothing in real terms. But if you are telling yourself there is no chance that this could break upwards quite aggressively, you might want to keep that stop loss very tight. Personally I think it's time we tested the $7,000 and what happens after that we won't know until we get there.

Cheers for reading.

I'll give updates as they come along, it's hard to write much worthwhile in this market as we are at such a cross roads and I'd rather give an opinion than yet another 'could go up, could go down' waste of time. Whilst I’m typing this it looks like someone just managed to cause a very quick dip selling off the change they found in their car ash tray.

Jun 17
Comment: If Bitcoin finds support at $6,480 then we are most likely leaving this first triangle
Jun 17
Comment: Scrap that, Mr decending wedge is going to get us out of this predicament -

Jun 17
Comment: So for the first time in what feels like a little while we have a pretty clearly defined plan as opposed to a reactionary approach.

We have our very clear wedge in white, the target of this breaking out by about 3:30am (GMT) tomorrow (18th). Gives us a perfect upside target to meet the decending trendline of the larger symmetrical triangle. Of course I doubt it will be so perfect but you get where i'm coming from.

When we hit this trend line we either will most likely reject, we then await the final test of the bottom trendline and we will now what Bitcoin would like to do for the next few weeks. Personally I am optimistic but let me know what you think and chuck us a like if this has helped.

So targets in order are - (Coinbase)

Down: $6,440 - $6,430
Up: $6,540 - $6,550
Down: $6,570 - $6,560

Then either it's onwards to the $5k area or back up towards the $11ks, I am biased to the latter at the moment but I keep an open mind as there is compelling evidence for both scenarios
Jun 17
Comment: Just realised my last target should of course be $6,470 - $6,460
Jun 17
Comment: As counterintuitive it might sound but this break upwards is making a bearish scenario far more likely in my mind.

I’m not 100% swayed yet but I have a nasty feeling we are going to chop sideways now and drop like a rock. My reasoning is that we needed that strong bounce off that lower trend line, I don’t see us being able to do so once all momentum is lost from more sideways action
Jun 17
Comment: Apologies for the many posts today if you've got your email settings switched on for anyone who follows.

But I have a new idea... you're not going to like it.

I wasn't going to share this, I was just messing around with some possible scenarios, since it looks like i'm going to have a late night... really wish Bitcoin would have some consideration for us poor souls in GMT time... it's bad enough here with a government hammering the self destruct button and now our timezone sucks for crypto, but anyway.

What made me share this is some scary trend lines...

Now you can see we are set up perfectly for Head and shoulders, maybe that means it won't happen. But regardless, you can't ignore it. Trendline A fits perfectly for resistance on our right shoulder, trendline B was our downtrend line which proved itself as pretty strong both as support and resistance, then we have the fact the distance from head to neckline just happens to perfectly meet this trendline as a target... spooky.

This is highly speculative too, but i'd bet everyon and their grandma is expecting a dead cat bounce to touch the triangle and head back down... But wouldn't it catch everyone with their pants down if there was a very big bounce off from this point, worth watching closely and in shorting movements like this I suggest a trailing stop like there's no tomorrow!
Jun 17
Trade active: If this trade was anymore active it'd be a goddam Yakult
Jun 18
Comment: What a strange evening that was.

We had a fakeout to the downside, very predictable and whilst I take a lot of manipulation theories with a pinch of salt, this one absolutely screams manipulation, that huge sell spike before we got to the main support didn't seem like natural behaviour to me at all.

So here we are at the crossroads!

For me it's 2 scenarios right now -

1. Bullish Gartley!

If we break the pink line then we are in flavour town

2. We cannot break the pink line and things get ugly as the pattern fails

Wait for confirmation because these here are choppy waters
Jun 18
Comment: What I think we are about to see now;

Retracement to $6,440, any lower than this will make me suspicious but at the same time as long as the main trendline holds then this is OK.

Shorts are looking like heading for a double top on small time frames, this is also good minor support for this theory. I then feel like we are heading for the mother of all squeezes up to around $7,000... if this happens I doubt it will stop there and bullish scenario, for the short term at least, is in play
Jun 18
Comment: Descending wedge on 5 minute chart, wait for confirmation
Jun 18
Comment: Just to reassure you that I haven't lost my mind, here's the gartly drawn properly, I was running out when I posted that so thought to hell with showing the proper retracements

I'm extremely torn at the moment because I am feeling confident that we will be testing the target shown, I am a bit iffy on the risk/ reward of this trade

Jun 18
Comment: What an exciting day, I rememember reading earlier a lot of ideas being shared with things such as 'leaving my short open', I bet there was some panic in their house today.

So so so Bitcoin you little rascal what are you up to

Well we seem to have a bull flag in the making, if this breaks upwards this could be fantastic! However be wary here because the rejection from $6,800 felt a bit strong to me, and that isn't really a proper resistance in the grand scheme of things.

I do think that there is a high chance that we reach our next target of $7,045 BUT there is just this awful doubting in my mind that this isn't quite the big move up yet and just watching longs go parabolic makes me wary that this could turn ugly if we can't break $7k.
Jun 18
Comment: I know that Ichi clouds are only useful combined with everything else, esecially on smaller timeframes.

But, be careful if you're long because I don't like the look of this
Jun 18
Jun 19
Comment: A useful tip for anyone who doesn't already do so, when the market is struggling to find direction, you should always keep Bitcoin Longs & Shorts open. As we can see below that whilst Bitcoin was flat all night, Bitcoin Longs was telling us a different story all together with a bearish pattern.

Likewise if you looked at shorts you'd see a bullish reversal that looks likely to be short lived

This is a great way to watch for the early signs of reversals as unlike straight up Bitcoin charts, these long and short orders are very hard to disguise due to the nature of margin trading
Jun 19

I do not like this move!!

This is too symmetrical, look at the retracements of each move in the boxes, technical indicators have not backed a lot of these movements. Proceed with extreme caution because I think we are seeing organised distribution here.

I'm seeing a few people saying this is an inverted head and shoulders but I do not trust any of it one bit. I'm usually the type to take claims of manipulation as sometimes slightly exagerated but after watching the charts closely today this has not seemed natural.

My best guess is that we will brak the neckline enough to cause buyers to jump in then we will dump hard, maybe i'm wrong but be careful just incase.
Jun 19
Comment: Haha so that was the wrong chart...

Jun 20
Jun 20
Comment: Adjusted timing of the final top by about 10 minutes but otherwise confirmed and broken our rising wedge.

However I do not expect to see this formation a fourth time, twice is coincidence, 3 is a pattern and as we all know these do not work when everyone knows them. We either bounce hard off this trendline or we are going straight down, and at the moment i'm leaning towards the latter as this distribution move seems finished to me

I am mulling over our next move and i'm conflicted. We could of course bounce off the bottom of the ascending wedge as we did in April, but I just have this feeling that it's not going to hold again. More than ever Bitcoin feels like a psychological game these days and if I had a silly amount of Bitcoin wanted to get everyone to buy them, I would create the illusion of a strong support line.

I might be going a bit tin foil hat but I'm somewhat uncomfortable that even a few of the more conservative traders I speak to are planning to ladder a partial buy order around this area to cost average based on the last bounce, but the lack of volume follow through and this suspicious price action is making me doubt absoloutely everything about the bounce, and thererfore the support as well.
Jun 20
Comment: Accidentally copied this into the comments, shows how much sleep i've had.

Here it is again anyway so everything's in order;

Sigh, here we go again I guess, it's getting on my nerves actually because you just can't trade this move for anything worthwhile.

I don't suggest anyone does trade this purple line because like I said, it's too obvious and I expect it to invalidate half way through just to throw everyone off balance, but it's something to be aware of anyway

You can consider a quick short if we break the white channel and could this be useful on the chance that we do break our ascending wedge, but as always use a stop and just be aware that if this is a controlled move then we can expect to see more plenty stop hunts before any real action.
Jun 20
Comment: So I don’t want to be a Debbie Downer, but we’re almost back at the same price we were about 24 hours ago. Let’s hold on to our pants for moment before calling the new bull market like a lot of folk seem to be, we so far have struggled making it to the top of our ascending wedge so that doesn’t look too promising
Jun 20
Comment: So i've been looking at the charts for the last couple of hours and i've reached the following conclusion.

1. It's going to get ugly real fast
2. The bottom will be within the next 7 days

So first things first we appear to have a bearish crab signalling a reversal of trend, volume is pitiful. I find it very confusing how anyone can look at the volume action and say it's a reversal. The only reason those pumps even felt larger is because the volume bars surrounding it are none-existant.in my view this entire move has been a distribution play and it's worked very well. For this reason I believe the next small run at our ascending wedge trendline will be our last before turning back down.

We have the perfect set up for a nose dive right now with shorts decimated and longs going up and up. The similiarity to this and the previous rally before crashing downwards is uncanny;

This now;

This is then;

The same signs of weakness are there and lacking volume

The difference this time however is we have that big ugly trendline above us and we are in a much more sensitive area, if it's percieved that momentum has stalled and this isn't the reversal I expect things to turn south pretty quick.

What happens next will largely depend on whether the yellow line can support us for a second bounce, should it not and we fall to the white line below it then we can get trapped under again. Should this happen then it can all go down hill pretty quick.

I'm inclined to say that this crash could come as soon as tomorrow but we'll see how things progress, personally I hope it's not tomorrow as i've got a 6 hour drive to look forward to and i'd hate to miss the fireworks.
Jun 22
Comment: Righto just a quick update on our immediate path ahead today;

There is an interesting convergence at the .618 retrace of the last small rally and 2 pretty capable trend lines, I am expecting a reaction with this point and if we base it on our current path this becomes even more likely; here's how I see today panning out

Things of course can change in an instant in these low volume times, but this scenario would fit nicely with the classic Bitcoin formula of bear trap followed by a bull trap then the actual move itself
Jun 22
Comment: So we went straight for the dump! I thought we might have retested resistance one more time but as I mentioned it wouldn't take much volume to send us down hill, the sell volume itself is very unimpressive at the moment however I am sure we will see a climax after this bounce.

I came across an awesome chart illustrating the cycle of squeezes and it's definitely worth taking a look at and leaving a thumbs up as this is the best presented
Jun 22
Comment: *best presented example i've found showing the traps you can fall into by following the crowd.

Jun 22
Comment: Be very careful in this area both from a long and short perspective.

We are currently cruising above both a trendline date back from the very beginning of this correction and a strong support line cross over very nicely at $6,150

I'm not saying this is going to be a full blown reversal but it's going to take a hell of a lot to bust through that support. Volume is increasing which is nice to see despite the sell pressure. If I was a betting man i'd say we are about to see a capitulation move down to $6,150 and a very sharp reversal to test our resistance. Then we will have to see what happens next.

I will be tempted to put a long above in the 6,400 area with a tight stop, because IF we reverse with volume, that is a pretty big if. Then you are not going to be able to jump on this train, as we've seen in the past a $1k jump is not out of the realms of possibility right now
Jun 24
Trade closed manually: Popped together a new idea with my thoughts of the market turnaround we are all waiting for
Jun 24
Sigh, here we go again I guess, it's getting on my nerves actually because you just can't trade this move for anything worthwhile.

I don't suggest anyone does trade this purple line because like I said, it's too obvious and I expect it to invalidate half way through just to throw everyone off balance, but it's something to be aware of anyway

You can consider a quick short if we break the white channel and useful on the chance that we do break our ascending wedge, but as always use a stop and just be aware that if this is a controlled move then we can expect to see more plenty stop hunts before any real action.
Movie idea; BITCOINATOR 3: RISE OF THE (algo trading) MACHINES

That's what I've been trying to tell people as well!
+1 Reply
MikeLeChat Vaggitarian
@Vaggitarian, Great minds ay haha

It does always strike me as strange how fixed to scenarios a lot of people get, its reminding me of the April reveresal more and more as this develops with the fakeout to the downside and everyone shouting to enter a short... looking at the shorts chart this morning should make anyone shorting this move sweat right now.

By the way I always read your username in the voice of Beavis, makes me chuckle to myself whenever I see it pop up
Good analysis mike thanks!!
+1 Reply
MikeLeChat ironplums
@ironplums, Thank you :)

A shame that bitcoin had other ideas to just go straight ahead and head for the triangle straight away haha. This low of volume is a flaming nightmare to predict
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