Slot
Short

Back to Bear

BITSTAMP:BTCUSD   Bitcoin / Dollar
Link to my previous forecast, which was quite accurate but personally missed the ride due to a misplaced sell order (~$15,-) -
Bitcoin Crossroads, how will June start?
. This one however I already acted upon.

You'll probably find this chart extremely messy, and I won't deny that I'm an inexperienced trader - as such I'd welcome any form of feedback or your thoughts on the recent price movements!

Introduction
So I went long about 2 months ago after the bearish trend line was breached and the well-known EMA lines crossed (indicated in this chart), with the idea of not looking back until the price would be above $5000,-. However, today I went back to bear after seeing the BTC price slowly slipping out of the 600s over the course of last week and reviewing current sentiment, charts and forum posts.

Why I took this trade
- The daily 10/21 EMA crossed, which is often a sign of imminent bearish pressure
- Weekly MACD is decreasing, which indicates there's no sign yet of a new bullish period forming for the upcoming months
- Volume is very weak, although in Bitcoin this alone doesn't necessarily indicates much
- The large amount of positive news recently had zero positive impact on the price, which make it seem that there's little support currently for prices above the 600s, or even in the 600s.

Uncertainty
- Daily Stoch RSI , MACD and other indicators already seem to be very low, which causes my main uncertainty for this trade I took

Forecast
- I currently have my bids set on a retrace to ~$475 and even a full retrace back to ~$340,- .

Related Ideas

ChartArt
2 years ago
It took some time until more people noticed the downtrend. Most of my short targets from 12 days ago have already been reached:

3 Bitcoin short targets and a Buddha quote
Reply
ChartArt
2 years ago
I got alerted when Bitcoin briefly got below $610, which was my defined warning signal to get out. Some good news kept us above $600, but the bulls finally gave up. Maybe we go only down to $450 but I think we can even make a full retrace back to $250. I was super bullish on Bitcoin the last months since April until I noticed this weekend that the volume is going down in the monthly trends. It also doesn't help that every mainstream press article about Bitcoin mentions that MtGox went broke where people lost all their money. And those 'interested to invest' people who do a little bit more research will discover the mainstream doomsday articles claiming that Bitcoin suffered a 51% attack. And nobody wants to invest in Bitcoin if the price trend looks like it's going down like a tulip bubble. Bitcoin needs a bubble to sustain mainstream interest. That's why I see the risk of a $250 price, which was unthinkable to me just a few days ago.

Here is my price correction warning from 18 days ago

Bitcoin is facing a larger correction
+1 Reply
Slot ChartArt
2 years ago
Thank you for sharing your thoughts ChartArt.

Personally I don't think news related to MtGox affects the price and sentiment much anymore, but this is purely based upon my own intuition. What I do believe however is that news follows sentiment and not the other way around - e.g. bearish traders will use any form of negative news to make their move as they already got their mind set.

I think Bitcoin is currently in a price discovery phase, and if I'd be an outsider looking at the price which rose from $13 in January 2013 to $1163,- in the same year - I'd consider that to be 'crazy' and 'unsustainable'. Regardless of it being a technology which most likely will continue to grow exponentially. With that thought in mind further price corrections are a very plausible scenario.

Myself, I don't perform any daytrading at the moment. I mostly look at daily, weekly and yearly charts. This is one of my favorites I like to gaze upon (which also correlates nicely with your $250,- statement).
snapshot


I too find it a probable scenario, it would bring us 'back to base' - perfect to build up a new bubble from there. Alternatively we could drop to 400s or 300s and start a new 'rally' from there, postponing such event. I find this very difficult to forecast, I guess best would be to assign trades based on probability.
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