Hello Friends and welcome to my second analysis on tradingview!
I'm a beginner (3 months) but I'm steadily learning and try to have a overall view of economics in my analysis, especially when it comes down to Bitcoin since it is more into Mainstream and "Mainstream-Investors" than most other coins.
So I don't want to discuss if or not QE of the ECB is one of the reasons why Bitcoin is currently in a bubble or not, but I see connections and want to make a status quo analysis on the current situation which Bitcoin is in right now and for sure there is and was a lot of easy and free money which got pumped into the markets and I'm very sure some of that also landed in Bitcoin.
I have the feeling that the market is full of hopes and dreams and fears and greed, but actually this has nothing to do in trading. A trader should trade what he sees and not make predictions like "100k in 2018" or whatever. This awakes false hopes in new traders like me, so from the beginning I tried to eliminate this thoughts in myself.
Coming down to Bitcoin Analysis.
1. The 21 Line was last time broken after Mt. Gox. After the over a year long correction phase we never crossed that 21MA line again, until we hit the 20k Target. For me this is a obvious target where many investors moved out and are now waiting for a correction to join back in. For sure nobody will know how long this correction will take and I'm not making any predictions. In the end of this analysis I'll write what my thoughts are on the further going of Bitcoin.
2. On the 22nd of January 2015 the ECB announced that they will pump from march ongoing 60billion € of easy money monthly into the markets via low interest rate credits. The chart reacts to this with a sideways trend, also there was the 200$ psychological line. All retracement-lines were broken before.
3. March 2016 had the announcement of 6 more Month of easy money. Additional 20billion more per month. Shortly after this the trading volume increased drastically, momentum was built up.
4.Announcement: Additional 9 month, from april 2017 decreasing the QE from 80 to 60b/month. By this time, hype kicked in. Bitcoin was all over the news, no matter where. "Revolutionizing technology!Will change the world!" And so on, the "dumb" money, so investors with no experience (me as well) entered the market and kept the momentum alive until we hit the target at 20k.
5. So we had january where there is the every-year sell off, we had a lot of bad news about regulations and also the ECB tightened their QE from 60 to 30b/month, this means for many investors to tighten their strategy, which we also saw in the stock market. It is no surprise bitcoin had this big of a correction.
6. From the beginning of QE (2) we had a steadily rising RSI with extreme overbought situations.
7. We are on a peak of Volume with a mix of bad news, QE tightening.
My claim(!) now is, that Bitcoin will go into an longer correction phase. I dont think we will hit 20k for a longer time again and can imagine Bitcoin to drop back to that initial up-trend to around 5k. Interest is draining, mainstream media is not as interested as before and so on. Good chances for traders to buy in when we think the bottom has been touched. I'm not conform with the "experts" who are big times invested in Bitcoin and say it will "moon". Reality shows me something different.
Thanks for your time, please leave a comment if you have a constructive critique or just let the thumb up :)
I'm a beginner (3 months) but I'm steadily learning and try to have a overall view of economics in my analysis, especially when it comes down to Bitcoin since it is more into Mainstream and "Mainstream-Investors" than most other coins.
So I don't want to discuss if or not QE of the ECB is one of the reasons why Bitcoin is currently in a bubble or not, but I see connections and want to make a status quo analysis on the current situation which Bitcoin is in right now and for sure there is and was a lot of easy and free money which got pumped into the markets and I'm very sure some of that also landed in Bitcoin.
I have the feeling that the market is full of hopes and dreams and fears and greed, but actually this has nothing to do in trading. A trader should trade what he sees and not make predictions like "100k in 2018" or whatever. This awakes false hopes in new traders like me, so from the beginning I tried to eliminate this thoughts in myself.
Coming down to Bitcoin Analysis.
1. The 21 Line was last time broken after Mt. Gox. After the over a year long correction phase we never crossed that 21MA line again, until we hit the 20k Target. For me this is a obvious target where many investors moved out and are now waiting for a correction to join back in. For sure nobody will know how long this correction will take and I'm not making any predictions. In the end of this analysis I'll write what my thoughts are on the further going of Bitcoin.
2. On the 22nd of January 2015 the ECB announced that they will pump from march ongoing 60billion € of easy money monthly into the markets via low interest rate credits. The chart reacts to this with a sideways trend, also there was the 200$ psychological line. All retracement-lines were broken before.
3. March 2016 had the announcement of 6 more Month of easy money. Additional 20billion more per month. Shortly after this the trading volume increased drastically, momentum was built up.
4.Announcement: Additional 9 month, from april 2017 decreasing the QE from 80 to 60b/month. By this time, hype kicked in. Bitcoin was all over the news, no matter where. "Revolutionizing technology!Will change the world!" And so on, the "dumb" money, so investors with no experience (me as well) entered the market and kept the momentum alive until we hit the target at 20k.
5. So we had january where there is the every-year sell off, we had a lot of bad news about regulations and also the ECB tightened their QE from 60 to 30b/month, this means for many investors to tighten their strategy, which we also saw in the stock market. It is no surprise bitcoin had this big of a correction.
6. From the beginning of QE (2) we had a steadily rising RSI with extreme overbought situations.
7. We are on a peak of Volume with a mix of bad news, QE tightening.
My claim(!) now is, that Bitcoin will go into an longer correction phase. I dont think we will hit 20k for a longer time again and can imagine Bitcoin to drop back to that initial up-trend to around 5k. Interest is draining, mainstream media is not as interested as before and so on. Good chances for traders to buy in when we think the bottom has been touched. I'm not conform with the "experts" who are big times invested in Bitcoin and say it will "moon". Reality shows me something different.
Thanks for your time, please leave a comment if you have a constructive critique or just let the thumb up :)