zhsloe
Short

Few reasons why BTC must go down some more

BITSTAMP:BTCUSD   Bitcoin / Dollar
TA is actually pretty simple here:
1) Bollinger Bands analysis - notice how the price was three times outside my BBs (21), marking a special condition of the market. That condition is called mass hysteria and it always calls for some kind of correction, which must lead us down enough to compensate previous strong bullish euphoria or speaking more technically - volatility means not only up, but also down.
2) June's rally was on lighter volume than October's one, meaning that the supply of losers for bulls to prey on is drying up. There is just no fuel for a new rally and we need to give it some more time.
3) The Directional system confirms that the uptrend is currently chilling down.
4) And the most conservative signal here, when confirmed - nearing bearish MACD cross.

Moving averages are still showing up and that's not going to change at least until 2017, I bet - but the rocket is not ready for launch yet. Minimal target for downmove - 560, then 510-470 area.
Trade active: First target reached, I would wait for a bounce and reshort higher, but it might not happen :p
Trade closed: target reached: SECOND TARGET REACHED! this is just crazy
Comment:
snapshot
BFX hack event initiated a really crazy ride, now let's TA it:
1) Major support level 460$-470$ has been confirmed.
2) The price was two days long outside of BBs, meaning that Mr. Market was really depressive at that moment, so I guess it is safe to say that we are not going to see such extreme conditions in the next few weeks.
3) Minor and intermediate EMAs are heading down, while the big 144-period EMA has been breached (first time since November 2015!) and is indifferent right now.
4) The Directional system showed some extraordinary readings during the big dump, now it seems like the trend is cooling down (ADX not heading up anymore).
5) OBV is not trending (shown by its EMA) and there is slight volume divergence between Juny dump and the latest one. Bears are of course still strong, but their supply of losers to prey on is drying up.
6) Awesome Oscillator is currently in Spring season.

I guess we still can go up some more this week and if not, expect some boring consolidation. Further downside is not to be expected right now. Note that this is a daily chart, so I'm talking about minor trend; weekly chart is still looking mid-term bearish:
snapshot
great analysis. very detailed.
Reply
oh wow. but dont you think the shorter supply being mined now will influence it upward? supply and demand?
Reply
zhsloe SpencerPool
Of course it will, just not right now - the fact is, bulls are out of steam and there are no signs that we are ready for another explosion of bullish euphoria for at least another two months
+1 Reply
We need more correction, I like the idea.
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