Hey guys, just a Bitcoin update since we blasted through all the resistance levels I'd been looking at. If you recall, I suggested that a break of the final linear resistance would have been a good buying opportunity. I also suggested back in January that Bitcoin was starting to look bullish, and that I was preparing for a breakout, once I saw some important diagonal resistances being broken. In this analysis, I will also include four important Bitcoin charts that I used to time the potential bottom. As you can see, if one bought around 3600 on January 14th, and then averaged down when we hit 3400 again, they would be in pretty massive profit. We perfectly hit my first green zone on this chart, even though it took longer to play out than I'd expected: January 14th:
Then, on January 30th, I posted about the final linear resistances, and that once they were broken, it would probably be a good sign to go long: January 30th:
By reading through, you can see that I was paying very close attention.
In mid-March, I started to realize that the market was looking pretty good, and that a full on reversal seemed like it might be about to play out. You can read about that in these two charts:
March 12th:
March 22nd:
But where to now? We are currently capped by the 5200 resistance area, and indicators are showing that we MAY be near a short term top. Since a lot of alts are either dropping or stagnating on their ratios, while some alts are even breaking down below important supports (GVT, ENG), the market actually appears to be a bit weak here. Some alts look strong (like NANO, for instance). The USD charts for some of the "weak" coins (XRP or ETH, for example) look pretty bullish because of Bitcoin. If those two are going to rise soon, I'd expect Bitcoin won't drop my much, and it may even have some room higher before correcting and consolidating. LTC, however, may be the closest to a top, since $100 was my second target when I bought at $32. It could head up to $130 as well, but we'll see. What concerns me a bit is that a bunch of coins seem like they've reached tops for now (ONT, LTC, NEO, BAT, WTC, etc.), and some alts are even below major support levels as mentioned above (ENG, GVT, etc.). In any case, the best trades made in this market are the long term ones. Even if we drop soon, I'm happy to have added where I did.
NO ONE REALLY KNOWS what's going to happen. No one could have predicted a straight move to 5.2K. I've been really good at predicting things recently, but I thought we'd get smacked down at $4.5K to test $3.8K again before rocketing up towards 6K. It's a bit of a catch 22 though...most people knew that if we made a higher high, the bear market would probably be over, so once that $4.5K area was reached, no one wanted to sell. People just wanted to wait for a pullback to buy more or jump in if they hadn't already. The result was that we went straight through. It's never simple in this market.
And this is why I'm presenting a few different outcomes. First, we could correct all the way down to the broken bear market resistance. The move up was so powerful that this doesn't have to happen. But I see 4.2K and 3.8K as worst case scenarios. This would be in line with the end to previous bear markets. I've had a hunch this won't look like the 2014-2015 bottom though, and it's not looking much like it so far. Obviously, there could be something else going on entirely, and we could see a new low (perhaps only briefly). Based on what has happened, this scenario has slim probability. We could also head up to test the previous log uptrend (light blue) as resistance. This would give us a $6.3K target. That trendline was our support for a long time before we broke down from it last November, so I expect it to serve as powerful resistance. If we break above that....then Bitcoin will have an accelerated growth period (unlikely, since growth rate should slow down over time). Another possibility is that we just retest between $4.5K and 4.7K. That's what a lot of people are betting on.....but the market doesn't always make it that easy.
Here's the Bitstamp log chart to show the broken log uptrend, and the possible 6.3K target:
I like to see analysis as a puzzle. The puzzle just got more complicated, which is why I'm not trading right now. I'm just waiting to see what happens - especially how the market reacts if Bitcoin corrects soon. I'm very happy with my recent trades, so I'll allow myself to take a break and see how this unfolds.
This is not financial advice. As I said, NO ONE KNOWS where we're headed. The best we can do is react to the information given to us, speculate about probabilities of outcomes, and be good observers.
-Victor Cobra
Then, on January 30th, I posted about the final linear resistances, and that once they were broken, it would probably be a good sign to go long: January 30th:
In mid-March, I started to realize that the market was looking pretty good, and that a full on reversal seemed like it might be about to play out. You can read about that in these two charts:
March 12th:
But where to now? We are currently capped by the 5200 resistance area, and indicators are showing that we MAY be near a short term top. Since a lot of alts are either dropping or stagnating on their ratios, while some alts are even breaking down below important supports (GVT, ENG), the market actually appears to be a bit weak here. Some alts look strong (like NANO, for instance). The USD charts for some of the "weak" coins (XRP or ETH, for example) look pretty bullish because of Bitcoin. If those two are going to rise soon, I'd expect Bitcoin won't drop my much, and it may even have some room higher before correcting and consolidating. LTC, however, may be the closest to a top, since $100 was my second target when I bought at $32. It could head up to $130 as well, but we'll see. What concerns me a bit is that a bunch of coins seem like they've reached tops for now (ONT, LTC, NEO, BAT, WTC, etc.), and some alts are even below major support levels as mentioned above (ENG, GVT, etc.). In any case, the best trades made in this market are the long term ones. Even if we drop soon, I'm happy to have added where I did.
NO ONE REALLY KNOWS what's going to happen. No one could have predicted a straight move to 5.2K. I've been really good at predicting things recently, but I thought we'd get smacked down at $4.5K to test $3.8K again before rocketing up towards 6K. It's a bit of a catch 22 though...most people knew that if we made a higher high, the bear market would probably be over, so once that $4.5K area was reached, no one wanted to sell. People just wanted to wait for a pullback to buy more or jump in if they hadn't already. The result was that we went straight through. It's never simple in this market.
And this is why I'm presenting a few different outcomes. First, we could correct all the way down to the broken bear market resistance. The move up was so powerful that this doesn't have to happen. But I see 4.2K and 3.8K as worst case scenarios. This would be in line with the end to previous bear markets. I've had a hunch this won't look like the 2014-2015 bottom though, and it's not looking much like it so far. Obviously, there could be something else going on entirely, and we could see a new low (perhaps only briefly). Based on what has happened, this scenario has slim probability. We could also head up to test the previous log uptrend (light blue) as resistance. This would give us a $6.3K target. That trendline was our support for a long time before we broke down from it last November, so I expect it to serve as powerful resistance. If we break above that....then Bitcoin will have an accelerated growth period (unlikely, since growth rate should slow down over time). Another possibility is that we just retest between $4.5K and 4.7K. That's what a lot of people are betting on.....but the market doesn't always make it that easy.
Here's the Bitstamp log chart to show the broken log uptrend, and the possible 6.3K target:
I like to see analysis as a puzzle. The puzzle just got more complicated, which is why I'm not trading right now. I'm just waiting to see what happens - especially how the market reacts if Bitcoin corrects soon. I'm very happy with my recent trades, so I'll allow myself to take a break and see how this unfolds.
This is not financial advice. As I said, NO ONE KNOWS where we're headed. The best we can do is react to the information given to us, speculate about probabilities of outcomes, and be good observers.
-Victor Cobra
Comment:
As you can see on the log chart, I did present another bullish possibility, and that's IF our uptrend is reclaimed. That would mean a quick, nasty move all the way to 9K-10K.
Comment:
If we did move up to 9K-10K somehow, I think we'd then have to come back down to find support on the light blue uptrend again, which would mean another long consolidation period near 6K.
Comment:
Just realized I used the log chart for this post, so you can ignore some of those descending trendlines, since they only make sense on the linear chart :P
Comment:
Looking at the long term BLX chart, we're actually following my yellow scenario so far (posted those possibilities a while ago), which indeed would mean 9K+ is possible. I guess we'll see what happens. Fairly unsure at the moment.
Comment:
A bunch of altcoins have really started dropping, so I think it's time for Bitcoin to correct a bit. I guess we'll see how far it goes.
