The Truth -- BTC Needs To Retest Lows To Confirm Sentiment

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
BTCUSD is looking better, but it still hasn't truly reversed yet. It still needs to reclaim position above key moving averages in addition to breaking all downward trends. The reactionary volume at 6K was nice, but has tapered off significantly since then. This suggests no new money has entered the market, but rather money that sold higher simply re-entered at a lower price point. This isn't good enough for long-term growth. In fact, a lot of liquidity has been lost during this correction. The lows need to be retested, if not set lower, to firmly establish (or confirm) hard support for these price levels.

So while it's nice to see the market "recovering" there's actually a lot left to do before you can even begin to think about where the price will be in 2018. Technically, this is still a bear market, and has NOT reversed yet. While the trend is in fact trying to change in favor of the bulls, the bears are not done yet and will likely test lower levels (even a higher low in the 8K area) to confirm support. Don't get ahead of yourself.

**Side Note**

In fact, I would posit that BTC may not get back to 20K ever again, and as the market evolves and changes, the necessity for BTC will be greatly diminished. Consider: The reason most people buy BTC is because they NEED it to convert it into the coin they actually want. This artificially inflates the price of BTC , and is why everything "follows" BTC , because so much is priced into it. However, this year, decentralized fiat exchanges are going to allow you to purchase ANY coin with fiat, in addition to being able to trade ANY coin for ANY other coin. This will dramatically alter the price and utility of BTC , and it's something I don't think a lot of people are taking into account. Once full-fiat exchanges are introduced, the game changes and so does the way we trade.

I'm not saying BTC /won't/ get to 20K or 50K, and this scenario may not come to fruition or change anything at all, but I am saying that there are fundamentals taking shape for 2018 that many people seem to be glossing over; in fact, I'm not sure how much of the market is even aware of this yet. I think it's worth bringing up.

Overall be excited, but temper your expectations. BTC and crypto in general are extremely manipulated, and have been for years. The price of just about anything in this space simply explodes, and does nothing but go higher and higher and higher. Simply invest your money, and it turns into more. There's a dangerous psychology in the market right now (and has been) around the price action and expections in BTC and crypto. George Soros' Theory of Reflexivity states that the psychological sentiment towards an asset can be artificially created/manufactured/boosted through the manipulation of the price over long periods of time. In other words, if the price always goes up, and nothing ever seems to be able to stop it, people will artificially find more value in it than may otherwise exist, and begin to naturally support those manipulated prices and even rage for HIGHER prices.

BTC is a pretty good example of this, and this psychology exists quite unhealthily in this space. Try to keep an open and independent mind right now. While it may look like nothing but opportunity here, the situation could actually be quite dangerous.

And remember, this is the same George Soros' who funds Bitcoin Core / AXA ...

Something to think about.

Trade safe, trade smart, and be logical and rational.

TLDR: BTC looks good but it has some big hurdles to overcome. Likely to see a dip/retest of old lows, and if not, at least set a higher low to confirm support levels. Failure to do this will likely result in a bigger crash later, the same thing we just went through by getting too high too fast. A real bull wants to see a retest of lows. Remember that, because real bulls still have a lot of money to enter the market and won't until the market provides certainty that it has stable support levels.

Comment: Now we know a single entity is responsible for buying a majority of this bounce.

If the market turned around due largely to a single person buying $400MM worth of BTC, we are definitely overbought and need to retest the lows.

The monopolies in this space are growing.

Comment: Also right now BTC is testing my final resistance of 10.1K on the 4 hour 200EMA. A successful break of that, sustained, really opens the doors to a much larger breakout.

If wait for it to be stable before going margin long. Remember the faster it goes up without stopping the more it's going to crash. We just experienced a crash like that for that very reason.
Comment: Approaching major test of 11,187 (11.2K) here. Something to watch closely.
Comment: Nailed the key resistance. We will see how far she drops now. Working on updates tonight for projections.
Comment: 10.4K is where I see it dropping to here.

Anything lower than that will be fairly extreme. Need a little more time.

Should end up being a roughly 8% drop. Otherwise, lower would get us looking at 9k and even 8K targets. A bounce here would justify a short-term long position on the "oversold bounce" if you can manage it.
Comment: I mean, we saw it this coming a mile away did we not? Extended a little further than I expected, but the result was predictable.


Insightful commentary. My response to those ideas would be that I believe (like many others) BTC may lose favor (or never really gain the favor) for being used as in daily exchange sense. I believe the gold 2.0 theory. It will rise not because of its utility as a currency, but as a store of value. Like gold, it is finite- it is given value because people SAY it has value (true of any fiat currency). In a digital age, it could replace gold as an alternate store of value against traditional fiat currencies.

That’s why I believe its value will rise in the long term. It has most all of the qualities of gold, and with some that it does not.

And why would it be chosen? Legacy. “First” benefit. The product/technology that is the most well known, with the longest history tends to win for that simple fact. It is the first.

Thanks again for your thoughts.
+4 Reply
Xatos TheGush
@TheGush, Totally agree. I was going to add the same insights into my original post but it stopped letting me add more characters! Cheers.
Thanks for being a realist, and taking the time to share technicals with the community.
+1 Reply
Xatos BDC604
@BDC604, Appreciate the kind words good sir.
Thank you.
+1 Reply
good call
Approaching major test of 11,187 (11.2K) here. Something to watch closely.
Banned again!!! what did you do???
Whats the next major level of resistence?
Xatos Agent_of_Maat
@Agent_of_Maat, If it keeps climbing, $11,158 would be the previous fib it bounced on, as shown in the chart. 99% chance it would reflect off of that before pushing through it.
Home Stock Screener Forex Screener Crypto Screener Economic Calendar How It Works Chart Features Pricing Refer a friend House Rules Help Center Website & Broker Solutions Widgets Charting Solutions Lightweight Charting Library Blog & News Twitter
Profile Profile Settings Account and Billing Referred friends Coins My Support Tickets Help Center Ideas Published Followers Following Private Messages Chat Sign Out