Hi! This is my first ever article on TradingView. I am not an experienced trader nor investor, but looking at the recent surge of BTCUSD, and its price going up 15% in a day (a week ago), with many claiming a 'BULL RUN', I would like to question the real validity of this claim for many reasons.
These are my own opinions, if you do not agree, PLEASE DO NOT SHOW HATE, but instead, criticise my analysis and explain why you think BTC will 'surge'!
NOTE: This is just analysis/advice, DO NOT FOLLOW this trade blindly - I take no responsibility for it...
Since December 2017/January 2018, we saw BTCUSD drop from highs of circa $20,000. From here we have seen many surges and then consequent major sell-offs, as highlighted by the green ellipse regions (for buy signals) and red ellipse region (for sell signals). Looking purely at price action we can see that BTC has had smaller and smaller moves since it hit its high around the end of 2017, as shown by the decreasing size of the ellipses regions, till the major sell off in November/December 2018. This is just one of the cases as to why BTC is extremely unlikely to just go on a bull run without any real pre-market surge trading volume being present where there is NO stupid, ridiculous BTC predictions as soon as BTC starts to go up in value. Moreover, there must be a valid reason for price to move, and looking at the Crypto market right now, I cannot see how there is any development or advancement in BTC to the extent it should even be on a proper bull run when no BIG institution really claimed a big buy into BTC or other cryptocurrencies for a reason.
We are currently getting news of lots of cryptocurrency developments, including lots of blockchain development however I sincerely believe that those who are investing in Cryptocurrencies in the short term are looking for a quick way to become a millionaire. This sort of capital is not sustainable. Although, I believe now that we should look for long term capital, from investors who now understand the technology surrounding the blockchain and how it is beneficial for society, with its utility cases and so forth. Everyday, we are hearing firms show an interest in the blockchain and cryptocurrencies. This news does not mean we need to see a surge in price – why, you may be thinking? Although the interest is present, the sort of capital to pump this market higher is not present. Don’t get me wrong, cryptocurrencies could be like the rise of social media or the dot com boom/slight bubble, however we need to see more interest from the normal person and not just firms for this financial sector to expand. Look today at the dot com online sector or social media - as we are using all these platforms, investments in these sectors have begun to rise and so has the value of these investments for early adopters. As the real use case for cryptocurrencies begins to expand and more people have knowledge of this, this sector will boom.
I think this sector needs to amass a lot of capital from other industries in order to flourish to the extent it will be recognised like a massive financial sector. Looking at the current economic state of many countries, and seeing global debt just grow in value, I think we are in for a recession. Moreover, from a technical point of view, we have seen consecutive economic growth across many countries, and seeing house prices alone in the UK slow down, economic and trading across nations decrease, and also the S&P 500 index decline in one month significantly (back in December 2018), just gives an indication how we are ready to go back to the gloomy times - I am looking forward to this though, do not worry!
Lots of investor capital, is mainly tied in investments in stocks or real estate. To be precise, the global stock market is worth around $100 trillion (do not quote me on this figure, it is slightly outdated and I found it online), whereas cryptocurrencies is just around $175 billion. The difference between the two is massive. What we need to see is investor capital transfer from stocks and real estate into crypto, a brand new, low-cost investment in comparison to investing in real estate/stocks in order to profit from moves. The stock market bull run (the near enough 10-year S&P bull run seems to be coming to an end) is just looking to slow down to the extent we should see investor take their capital out and reinvest it elsewhere. Cryptocurrencies are probably new to most investors. Technology is growing right now at a faster rate compared to other traditional investments, particularly driven by its benefits to society and its utility cases, which crypto does hold. If investments do start to rise in crypto and we see the total market capitalization of cryptocurrencies rise, we could easily be ready to have the true cryptocurrency surge – trading volumes would significantly increase and buy orders will just pile up. Moreover, just looking at the UK’s real estate market, we are seeing laws being tightened on letting out properties and claiming interest when renting out a buy to let property as an investor. All the laws being tightened just gives way for cryptocurrency development & the mass collection of lots of investor capital – this will allow the market to just surge!
So, back to the main topic, BTC did see some sort of a mini bull run over the last week, but looking at the market, there was no really much advancement in Cryptocurrency laws and so forth. And there was just news being put out about fake trading volumes on certain exchanges. And we saw Bithumb have a sort of internal hack (I do understand they are not the biggest exchanges for currencies, but still), so BTC should have been sold off as this is what happened with Mt Gox issue - and if an asset is hacked, it does put out to investors the actual question of security when holding the asset. Is it worth holding if it can just be hacked and you possibly can't just get it back? I would say this would look to drive price down.
SO WHY DID BITCOIN JUST SURGE IN VALUE?
It was just a breakout after it was in a major long-term consolidation zone, since December 2018 (it was trading around the $4000ish region throughout Q1 2019). I think that price may also have broken out as for Q1 2019, BTC did not make much swings in terms of price significantly compared to the bullish green candle painted this week. I do think that the breakout was manipulated to an extent (pictures to be posted below as comments) as there was no real reason for such a huge surge otherwise - however as it broke out over a major long term monthly resistance around $4400-4500, then it should really mean somewhat of a surge (I do not think 15% was really necessary) - but does this mean a bull run? NO. Here is why. Essentially, over many weeks we have been in a long-term consolidation zone, highlighted in yellow. A break of this consolidation zone was purely just crypto moon boy’s just creating this minor surge in value. Also, from a technical stance, you can see a breakout from the two support & resistance lines drawn in green, showing the surge as price action began to become less volatile over weeks, causing this surge.
Since BTC just surged in value, there were many articles stating a bull run. I think if there are articles just stating a bull run, then it is not a bull run but media manipulation in order to influence the underlying price of an asset. Thinking from a personal perspective, media reporters may use platforms in order to influence other people’s investments, mainly using clickbait titles in order to implement the fear of missing out. Human psychology is a massive role in deciding one’s investments, and when hearing BTC may go from $5000 to $50000 in a year, many will just jump on the bandwagon with no idea of BTC, in hope of being a millionaire. I think when we start to see these articles fade out, and the real value of cryptocurrencies begin to be reflected amongst society, then we will see a bull run. As an example, many may recall that people were thinking AirPods were stupid when they were first released, with people claiming they looked weird – look now, a few years later and now if you walk across Bond Street many people are wearing them. Why? Mass adoption by society, and this needs to happen with cryptocurrencies – people invest not for a quick buck, but for its utility cases, self-belief in the asset and the companies running the cryptocurrency space, underlying technology and long-term impacts.
Moreover, we have seen trading volume surge since this breakout. I believe this is just some whales, institutions and moon boy’s jumping on the crypto ‘bull run’. Mistakenly seeing small gains as a reversal of the market is an easy mistake to make, and I think many people may allow their human desire of money emotion to just let them invest in a small pump.
Also, just to put it out there, there on a weekly perspective of this asset, we are only forming lower highs on the weekly timeframe, so I do not see any reason to see a surge in its value whatsoever. This lower high idea just further hyperbolises the fact we are still in a bearish market. Yes, we may have seen this market break certain moving averages, but that does not mean a bull run. If you are a trader, how many times have you seen MAs cross, thinking it’s a reversal but instead you get caught out?
So, where do I see price heading for now? Still bearish to be honest. I think we may see BTC go towards $5700-$6400 ($7800 at most) in the short term, entering one of the blue regions highlighted on the chart. From here, price should look to move back down. I think we will see BTC tap into some long-term support lines, which I am hoping (ie. BTC fall to around $2000 and just below). I think this is important as it allows the correction of an underlying asset. In terms of market cycles, it is common for a stock to tap into long term support levels, as shown below by the S&P 500 during the 2007-2009 global financial crisis (it hit into a long-term trend from the 1980s and broke the support level slightly). This should further solidify the reasons as to why price needs to hit these levels.
From the BTC chart above, I predict it will tap into the blue support trendline drawn for the least, within the next year at most hopefully, meaning price should look to head towards $2000.
All in all, for this market to move ahead and surge, I think crypto moon boy’s need to go and we need to see price plummet, so investors jump on board quicker. As time evolves, we are seeing the time taken for certain ROIs to be achieved take less time, and I wouldn’t be surprised if this market just surges in a matter of weeks or days. I would ideally be looking for a surge around May 2020, when the bitcoin halving drops as this is when we will see the BTC block mining reward halve, and coin reward decrease. This would mean supply of BTC will be slightly strained, so any increase in demand will mean price will shoot up, with excess demand. (Please correct me if this is wrong, I think the terms used may be off!)
I think when your grandparents know what bitcoin is and what the logo of it looks like, then only will mass adoption be technically in process, allowing a surge!
If you read it to all the way down here, thanks for showing some support to this article! Tell me where you think BTC and Cryptos are heading next! Comment below all your ideas about the future of cryptocurrencies! Buy or Sell and why? Additionally, drop me your charts for it, that'd be great so I can see where you are coming from. I'm a new guy to the FX & Crypto market, trying to learn FX & Crypto, and I'd appreciate any help people may offer!
Please drop a follow! I need reputation points!!
These are my own opinions, if you do not agree, PLEASE DO NOT SHOW HATE, but instead, criticise my analysis and explain why you think BTC will 'surge'!
NOTE: This is just analysis/advice, DO NOT FOLLOW this trade blindly - I take no responsibility for it...
Since December 2017/January 2018, we saw BTCUSD drop from highs of circa $20,000. From here we have seen many surges and then consequent major sell-offs, as highlighted by the green ellipse regions (for buy signals) and red ellipse region (for sell signals). Looking purely at price action we can see that BTC has had smaller and smaller moves since it hit its high around the end of 2017, as shown by the decreasing size of the ellipses regions, till the major sell off in November/December 2018. This is just one of the cases as to why BTC is extremely unlikely to just go on a bull run without any real pre-market surge trading volume being present where there is NO stupid, ridiculous BTC predictions as soon as BTC starts to go up in value. Moreover, there must be a valid reason for price to move, and looking at the Crypto market right now, I cannot see how there is any development or advancement in BTC to the extent it should even be on a proper bull run when no BIG institution really claimed a big buy into BTC or other cryptocurrencies for a reason.
We are currently getting news of lots of cryptocurrency developments, including lots of blockchain development however I sincerely believe that those who are investing in Cryptocurrencies in the short term are looking for a quick way to become a millionaire. This sort of capital is not sustainable. Although, I believe now that we should look for long term capital, from investors who now understand the technology surrounding the blockchain and how it is beneficial for society, with its utility cases and so forth. Everyday, we are hearing firms show an interest in the blockchain and cryptocurrencies. This news does not mean we need to see a surge in price – why, you may be thinking? Although the interest is present, the sort of capital to pump this market higher is not present. Don’t get me wrong, cryptocurrencies could be like the rise of social media or the dot com boom/slight bubble, however we need to see more interest from the normal person and not just firms for this financial sector to expand. Look today at the dot com online sector or social media - as we are using all these platforms, investments in these sectors have begun to rise and so has the value of these investments for early adopters. As the real use case for cryptocurrencies begins to expand and more people have knowledge of this, this sector will boom.
I think this sector needs to amass a lot of capital from other industries in order to flourish to the extent it will be recognised like a massive financial sector. Looking at the current economic state of many countries, and seeing global debt just grow in value, I think we are in for a recession. Moreover, from a technical point of view, we have seen consecutive economic growth across many countries, and seeing house prices alone in the UK slow down, economic and trading across nations decrease, and also the S&P 500 index decline in one month significantly (back in December 2018), just gives an indication how we are ready to go back to the gloomy times - I am looking forward to this though, do not worry!
Lots of investor capital, is mainly tied in investments in stocks or real estate. To be precise, the global stock market is worth around $100 trillion (do not quote me on this figure, it is slightly outdated and I found it online), whereas cryptocurrencies is just around $175 billion. The difference between the two is massive. What we need to see is investor capital transfer from stocks and real estate into crypto, a brand new, low-cost investment in comparison to investing in real estate/stocks in order to profit from moves. The stock market bull run (the near enough 10-year S&P bull run seems to be coming to an end) is just looking to slow down to the extent we should see investor take their capital out and reinvest it elsewhere. Cryptocurrencies are probably new to most investors. Technology is growing right now at a faster rate compared to other traditional investments, particularly driven by its benefits to society and its utility cases, which crypto does hold. If investments do start to rise in crypto and we see the total market capitalization of cryptocurrencies rise, we could easily be ready to have the true cryptocurrency surge – trading volumes would significantly increase and buy orders will just pile up. Moreover, just looking at the UK’s real estate market, we are seeing laws being tightened on letting out properties and claiming interest when renting out a buy to let property as an investor. All the laws being tightened just gives way for cryptocurrency development & the mass collection of lots of investor capital – this will allow the market to just surge!
So, back to the main topic, BTC did see some sort of a mini bull run over the last week, but looking at the market, there was no really much advancement in Cryptocurrency laws and so forth. And there was just news being put out about fake trading volumes on certain exchanges. And we saw Bithumb have a sort of internal hack (I do understand they are not the biggest exchanges for currencies, but still), so BTC should have been sold off as this is what happened with Mt Gox issue - and if an asset is hacked, it does put out to investors the actual question of security when holding the asset. Is it worth holding if it can just be hacked and you possibly can't just get it back? I would say this would look to drive price down.
SO WHY DID BITCOIN JUST SURGE IN VALUE?
It was just a breakout after it was in a major long-term consolidation zone, since December 2018 (it was trading around the $4000ish region throughout Q1 2019). I think that price may also have broken out as for Q1 2019, BTC did not make much swings in terms of price significantly compared to the bullish green candle painted this week. I do think that the breakout was manipulated to an extent (pictures to be posted below as comments) as there was no real reason for such a huge surge otherwise - however as it broke out over a major long term monthly resistance around $4400-4500, then it should really mean somewhat of a surge (I do not think 15% was really necessary) - but does this mean a bull run? NO. Here is why. Essentially, over many weeks we have been in a long-term consolidation zone, highlighted in yellow. A break of this consolidation zone was purely just crypto moon boy’s just creating this minor surge in value. Also, from a technical stance, you can see a breakout from the two support & resistance lines drawn in green, showing the surge as price action began to become less volatile over weeks, causing this surge.
Since BTC just surged in value, there were many articles stating a bull run. I think if there are articles just stating a bull run, then it is not a bull run but media manipulation in order to influence the underlying price of an asset. Thinking from a personal perspective, media reporters may use platforms in order to influence other people’s investments, mainly using clickbait titles in order to implement the fear of missing out. Human psychology is a massive role in deciding one’s investments, and when hearing BTC may go from $5000 to $50000 in a year, many will just jump on the bandwagon with no idea of BTC, in hope of being a millionaire. I think when we start to see these articles fade out, and the real value of cryptocurrencies begin to be reflected amongst society, then we will see a bull run. As an example, many may recall that people were thinking AirPods were stupid when they were first released, with people claiming they looked weird – look now, a few years later and now if you walk across Bond Street many people are wearing them. Why? Mass adoption by society, and this needs to happen with cryptocurrencies – people invest not for a quick buck, but for its utility cases, self-belief in the asset and the companies running the cryptocurrency space, underlying technology and long-term impacts.
Moreover, we have seen trading volume surge since this breakout. I believe this is just some whales, institutions and moon boy’s jumping on the crypto ‘bull run’. Mistakenly seeing small gains as a reversal of the market is an easy mistake to make, and I think many people may allow their human desire of money emotion to just let them invest in a small pump.
Also, just to put it out there, there on a weekly perspective of this asset, we are only forming lower highs on the weekly timeframe, so I do not see any reason to see a surge in its value whatsoever. This lower high idea just further hyperbolises the fact we are still in a bearish market. Yes, we may have seen this market break certain moving averages, but that does not mean a bull run. If you are a trader, how many times have you seen MAs cross, thinking it’s a reversal but instead you get caught out?
So, where do I see price heading for now? Still bearish to be honest. I think we may see BTC go towards $5700-$6400 ($7800 at most) in the short term, entering one of the blue regions highlighted on the chart. From here, price should look to move back down. I think we will see BTC tap into some long-term support lines, which I am hoping (ie. BTC fall to around $2000 and just below). I think this is important as it allows the correction of an underlying asset. In terms of market cycles, it is common for a stock to tap into long term support levels, as shown below by the S&P 500 during the 2007-2009 global financial crisis (it hit into a long-term trend from the 1980s and broke the support level slightly). This should further solidify the reasons as to why price needs to hit these levels.
From the BTC chart above, I predict it will tap into the blue support trendline drawn for the least, within the next year at most hopefully, meaning price should look to head towards $2000.
All in all, for this market to move ahead and surge, I think crypto moon boy’s need to go and we need to see price plummet, so investors jump on board quicker. As time evolves, we are seeing the time taken for certain ROIs to be achieved take less time, and I wouldn’t be surprised if this market just surges in a matter of weeks or days. I would ideally be looking for a surge around May 2020, when the bitcoin halving drops as this is when we will see the BTC block mining reward halve, and coin reward decrease. This would mean supply of BTC will be slightly strained, so any increase in demand will mean price will shoot up, with excess demand. (Please correct me if this is wrong, I think the terms used may be off!)
I think when your grandparents know what bitcoin is and what the logo of it looks like, then only will mass adoption be technically in process, allowing a surge!
If you read it to all the way down here, thanks for showing some support to this article! Tell me where you think BTC and Cryptos are heading next! Comment below all your ideas about the future of cryptocurrencies! Buy or Sell and why? Additionally, drop me your charts for it, that'd be great so I can see where you are coming from. I'm a new guy to the FX & Crypto market, trying to learn FX & Crypto, and I'd appreciate any help people may offer!
Please drop a follow! I need reputation points!!