We are still in a bearish trend/market - until we break the upper downward line.
I think we're in a bull trap, maybe the last one before we see a double bottom at $6000 or slightly lower (see yellow lines).
Then, I think we will see a rise to $7500, with a possible pullback where we will consolidate for a few months, before we gain new strength and start to go up again in a new bull trend/market.
What am I basing that off?
1) Price vs. volume.... Although we are seeing some bigger green candles on the moves, the overall volume is still low and doesn't indicate a new bull run by any means. To have a strong uptrends, volume should follow.
2) We are simply still trading inside the bearish channel on the daily and weekly. Until that is broken, a new (true) bullish trend isn't established.
3) We just had a parabolic run (10x)!!! Those do not come every week or month or year for that matter. The last parabolic run in BTC was in late 2013... BTC is following the same chart pattern as back then: a 70% retracement, a big bounce (current bull trap) and then further bearish movement to a total 82% retracement. That would put as at around $3000-4000. Not sure we will go that low - but a double bottom is very realistic.
4) Just about every "bubble" (which is really just the correction of a parabolic run) follows the same chart pattern - dotcom bubble in 2000 as well... it's a market cycle which has happened over and over again in history in many markets and it will repeat itself. Only out-of-this-world amazing news will change that. That's why their forms are pretty similar and it wouldn't be stupid to compare that current bullish trend to the bull trap of 2014 after the 2013 parabolic run or the dotcom bubble.
To sum up - I am not buying here or anywhere in $10,000's. We might see a move to $11,500 and touch the downward trend line or we might top here at $10,800... I don't know. We are good in the longterm, I believe in blockchain and the crypto space. But in the shorter term, we are going down to consolidate before next legs up.
Let's see how it plays out. Happy trading!
Thoughts? Happy to discuss. This is my opinion - and an idea - not financial advice.
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I want to add: If in case we break the upper downward trend line at $11,500 ish, we still need to break $12,200 and $13,000 before a new bull trend is truly confirmed... if that happens and volume follows the move... I will be convinced that a new bull trend is taking place.
Let's see how it plays out. Happy trading!
Thoughts? Happy to discuss. This is my opinion - and an idea - not financial advice.
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Here is a link that show exactly where we are compared to previous bubbles in BTC (and the dot com one). Great pattern recognition and nicely visualized.
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Strong selling coming in - that is something you don't want to see on a true bull run... Dropped through the immidiate upside channel trendline support, but still holding the overall trend until it break $9500.
I do believe the market needs breather and that way too many alts are overrated. And I do believe BTC has once again lead people into a bull trap.
Let's see how it plays out. Happy trading!
Thoughts? Happy to discuss. This is my opinion - and an idea - not financial advice.
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Time for an update! Are we gonna break out of the bear market cycle or are going down?
Personally, I would be very surprised if it does breaks out of the $11.8-12.2k resistance... It might do a fake-out though.
It does looks like some big players/ major forces wants it to go up - notice how has been pushed/"manipulated" at all critical levels of resistance on the ruse, where big buying comes in every time. I just think BTC and the overall market needs a breather after the parabolic run, which is why I think it needs to come down and consolidate more before it takes off again. That is just my opinion.
Disclaimer: I am holding fiat atm and although I would like to buy cheap BTC, a new bull run after breaking the bear market cycle would probably be better for making profits.
Let's see how it plays out. Happy trading!
Thoughts? Happy to discuss. This is my opinion - and an idea - not financial advice.
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And it looks like I was right - it was a fake-out, a bull trap!
BTC dropping on huge volume, which is not a good sign and would not be happening if this was a true bull run. Biggest volume red volume since our new low at 6k. Look at the chart - that volume shows up at market TURNING POINTS. This is a turning point and we will head lower.
I agree with your analysis. The low volume for current trend is a strong argument, which can be seen in detail with volume profile. It clearly shows < 4.4k did have had the most trades by far (both cumulative as per period and vs relative period of now) and where smart money from institutions have stepped in (around may-jun + nov-dec). This low volume, in my view, comes from the average joe buying at the top, panic sellers and a small group of daytraders-/scalpers + bots.
Every time bitcoin makes irrational moves (no pullbacks to at least 50%), it's making parabolic bull runs and comes back hard all the way down to test the first 50%, which then retraces from bottom to top 65-85%. I don't know why this keeps happening with crypto, maybe because of many uneducated and/or emotional traders, giving profit back or even losses to the experienced and patient trader.
We again see the fomo from the usual suspects which they did last time around the top. The masses are getting bullish again, while I've closed all scalp positions and sitting back in cash. Risk vs reward is not worth it for me at the moment.
Bitcoin doesn't like double bottoms for the lows on pullbacks, if we go down, I'm fairly sure we penetrate 6k without any problems right to 5k and maybe ending around 4.6k for consolidation, which I've to reevaluate further to make any further statements. I've yet to see capitulation, which the V reactions don't show, in fact the contrary, hence people got rekt by going against the trend/momentum (stopped out or even liquidated on their overleveraged positions). I'll be ready to short when the time comes and I won't be surprised next monday london time, when the big players go back to their offices, we see the first retracement if not a dump heading to 5k. This doesn't make any logical sense what's happening.
Remember, almost all of feb and may are known to be the worst months of stocks and cryptos. I can't say if we'll enter a bear market, I don't see it with sentiment and people who still need to step in (especially wall street who cannot join the unregulated space, other than futures in which they have no control of, makes no sense to them - although, a good fud story will be once again blamed for the correction and seen as the cause of a "crash", when in reality, it was all known by looking at the charts). If we do enter a bear market, I think bitcoin is done for, becoming obsolete, for ever, as it won't be worth it to mine it anymore, so the entire network will shut down and market price will plummet. I've always seen bitcoin as an experiment and it has succeeded now that everyone knows about it. Next to that, tech gets obsolete fast, we've got so many other coins that keep improving, then the next one will come out. It's good for trading though, not for investment and for sure not a store of value (you can smell anybody who disagrees in what stake they've).
Maybe one has to do DD and FA for quality projects with real businesses who got their paperwork and team in order to make the gains bitcoin has made, since the law of big numbers are already in effect and only this way and/or a consistent way of making profit in trading (the power of compounding: +2% daily + reinvesting/-trading makes 100% a month) are the only ways to get that 10000x return.
I've hoped this shed some light on the current situation as it unfolds in my view + your own critical thinking to make you a successful trader to enjoy your freedom and needs which you deserve.
thombooo
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@cryptogast33, Nice analysis on the market. thanks for that and I wholeheartedly agree with you on the most part. I don't agree that BTC will become obsolete (at least not in the near future). But let's see how lightning network pans out. But yes, don't just assume anything... that it will go 100k or that it will go $0. Do your dd, keep a close eye on the overall market, learn the tech and don't just blindly HODL.
kenappleby
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ya, i've been thinking lately (without as much detail or evidence as your idea) that, "man, this just can't continue all the way into summer, let along spring." It's way too great an uptrend for the last couple weeks, and people are going to sell at some point. All the newbies (myself included to some extent) that are still in the game after the big bears came are still holding expensive bags I think (see my XRP buy at 3.20, ew), and now they're getting a taste of nice gains- but they will be surprised and scared when this corrects. I've been sweating under the pressure of greed to sell my longs I bought on the 6th and 11th since there's likely a drop coming. I'm gonna hold tho, and try some day/swing trades with a little some loot. Thanks for the insight!
thombooo
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@kenappleby, yeah unfortunately a lot of people bought in during the bear market... which is an extremely tough market for newbies to the crypto space. I have been fooled as well. But I started studying the charts, the market cycles and following more experienced people. And I am a lot smarter now.
Have you considered cost averaging to get your average down?
kenappleby
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@thomasnh88, So, I'm kind of in the same boat as you. I've been reading, watching and learning, and thank god. I was down 40% on my folio, and now I'm broke even.
You know, I think at this point I don't mind cost averaging down on coins/tokens that I'm deciding to hold long. But I learned from #datadash that it's better to just set a stop and get out early. I guess the difference for me when it's better vs worse to average down is that you have to place the trade in a shorter/mid/longer timeframe first (like pros say- plan your trade first). Then, if you're just trading the coin, but don't believe in it long-term, then stops are crucial. For me, this was my stupid XRP FOMO buy. XRP is just leveraging the tech to continue crappy banking power practices. But, say I bought ETH, EOS, NEO or something else I like longer, then the cost averaging down would be a nicer play.
Nice question, bud, thanks
thombooo
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@kenappleby, very nice thoughts and I agree... Need to separate longterm holdings from coins you want to trade.
CryptoSwindle
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@kenappleby, Never cost average down, ever, if you're a trader or a serious investor. The pro's and smart money which I work with don't do that, ever.
They only look at cheap prices, not market price or high price, using market profiles and complex algoritmes using big data. They understand the law of big numbers and will never ever buy bitcoin for this price. The guys I work with are looking at 2-4k bitcoin price and they have patience and plans already set up. They don't even like bitcoin to start with, but use it as a hedge in their portfolio. Eth is what they're looking for and I've this from a lot of other people. I don't own any, but will as well when price is good and will stop scalping in favor of investing when the time is right.
Now, if you're a pro daytrader, you scale in and out and always use stops.
thombooo
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@cryptogast33, well I disagree on cost averaging. IF you are not a pro trader or investor yet, IF you already entered the market maybe at or near the top of fell for a bull trap, and IF you are comfortable (key word) putting more money in (that you can afford to lose), then there is nothing wrong with cost averaging at the right time. In fact, if you did that at 6k, you could have likely even out or even made money. Not everyone has access to big data and algorithms or want to be "Pro traders" with 5 screens and bots running the show :)
And a lot of other pro traders/investors recommend "cost averaging" when entering a market/asset by not putting in 100% of investment at one price point, but split in to several % pools.
CryptoSwindle
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@kenappleby, I keep hearing about cost averaging from people who never day traded and sudden expert investment advisers having been in this game less than one year and this is NOT the way to learn or become better. You learn from people who are better than you. If you want to learn more, read a lot of books from people who made it in this business. You can also look to join trader groups. I personally like WhalePool. You will be required to show your gains and losses in order to be part of the team or just be free to listen to their 24/7 live stream. You will understand why you don't cost average down and it's very simple and logical: You will lose even more money. The same goes with emotional and psychological treats like doubling down and overleveraging to make up your losses, which in the end will blow up your account.
Either go with the trend or be a market maker. Nobody wouldn't be participating here on TV when they were the latter. Just some tips based on how many people I've seen rekt in this game.
I highly recommend to get your psychological state in order. There are some good books like Trading in the zone that might help you. Why? Because being iron in emotions and mindset will prevent you to lose more money (risk and money management). Trading is useless without mastering this first, unless one wants to become broke and another fail story like the > 90% others before you. I can guarantee you it won't be easy to make money when the big boys have all entered this space, unlike now when it's crazy easy.
thombooo
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@cryptogast33, Reading books, following pro traders and expert, joining groups, not over leveraging and getting your psychological state in order is great advice. Everyone should do that. I highly agree! Again though, not everyone wants to be "pro traders or investors" per se. I think everyone should know what they are investing in, why and have a plan. But not everyone wants to be glued to the screen 24/7, not everyone has access to big data and algorithms or want to be "Pro traders" with 5 screens and do stop losses and trade 5% here and there. People should do what they are comfortable with. Understanding the risk vs. reward.
Every time bitcoin makes irrational moves (no pullbacks to at least 50%), it's making parabolic bull runs and comes back hard all the way down to test the first 50%, which then retraces from bottom to top 65-85%. I don't know why this keeps happening with crypto, maybe because of many uneducated and/or emotional traders, giving profit back or even losses to the experienced and patient trader.
We again see the fomo from the usual suspects which they did last time around the top. The masses are getting bullish again, while I've closed all scalp positions and sitting back in cash. Risk vs reward is not worth it for me at the moment.
Bitcoin doesn't like double bottoms for the lows on pullbacks, if we go down, I'm fairly sure we penetrate 6k without any problems right to 5k and maybe ending around 4.6k for consolidation, which I've to reevaluate further to make any further statements. I've yet to see capitulation, which the V reactions don't show, in fact the contrary, hence people got rekt by going against the trend/momentum (stopped out or even liquidated on their overleveraged positions). I'll be ready to short when the time comes and I won't be surprised next monday london time, when the big players go back to their offices, we see the first retracement if not a dump heading to 5k. This doesn't make any logical sense what's happening.
Remember, almost all of feb and may are known to be the worst months of stocks and cryptos. I can't say if we'll enter a bear market, I don't see it with sentiment and people who still need to step in (especially wall street who cannot join the unregulated space, other than futures in which they have no control of, makes no sense to them - although, a good fud story will be once again blamed for the correction and seen as the cause of a "crash", when in reality, it was all known by looking at the charts). If we do enter a bear market, I think bitcoin is done for, becoming obsolete, for ever, as it won't be worth it to mine it anymore, so the entire network will shut down and market price will plummet. I've always seen bitcoin as an experiment and it has succeeded now that everyone knows about it. Next to that, tech gets obsolete fast, we've got so many other coins that keep improving, then the next one will come out. It's good for trading though, not for investment and for sure not a store of value (you can smell anybody who disagrees in what stake they've).
Maybe one has to do DD and FA for quality projects with real businesses who got their paperwork and team in order to make the gains bitcoin has made, since the law of big numbers are already in effect and only this way and/or a consistent way of making profit in trading (the power of compounding: +2% daily + reinvesting/-trading makes 100% a month) are the only ways to get that 10000x return.
I've hoped this shed some light on the current situation as it unfolds in my view + your own critical thinking to make you a successful trader to enjoy your freedom and needs which you deserve.