In-Depth Technical Analysis on BTCUSD July '20 - By Trading-Guru

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
In this idea I will break-down all the price action we have seen over the last few months and explain where I believe we will be headed in July 2020. I base my decisions for this analysis mostly on big world events such as COVID-19, GF , and the recent correlation of bitcoin to the legacy markets.

All of this is available for free, please give me a thumbs up if you appreciate this work.

Stage 1: The Uptrending Bullmarket
Bitcoin / USD was in a bullmarket for about two full months, without nearly any big retracement we found ourselves move 40% upwards in a very steady time. Not just BTC , but the whole world was bullish . Legacy markets flourished.

Stage 2: Corona
COVID-19 came. Ouch. We went from $10,500 to $3850 in a month. The biggest drop started when Trump announced that European travel will be banned.

Stage 3: Recovery
Even though the unemployment rates skyrocketed, and COVID-19 got worse every day, the majority of the panic was gone. We've seen an incredible recover, close to our previous high!

Stage 4: Contemplation
Some more bad news came in, new daily COVID-19 cases are at a world high right now as new markets start to face issues. The world is raging over GF . Lot's of bad news is coming out about how companies struggled financially, and all it has done so far is added just enough bears to keep the price stable.

Stage 5: New Direction
After one month of non-stop bad news, it's pretty impressive that we have only seen a sideways movement. This means that the market is still inherently bullish , but that positive price action is being stopped just temporarily. It is only a matter of time before more good news will come out, some more progress about a vaccine might be made, public statements against racial discrimination or police violence might come up, etc. This will remove those bears from the markets and will make prices surge again. My advice is to go long for this reason, but try to leverage the current contemplation period to buy as low as you can. Anywhere you can buy below $9000 is a great win.

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- Trading Guru

This post does not provide financial advice. It is for educational purposes only!

Comment: What a beautiful retracement it is that we are witnessing now. I know this will cause many of you to panic, but don’t despair. This panic sell-off is creating fantastic buy opportunities! Act rationally. Just pretend you are in a regular store - Bitcoin used be worth $10,000 not long ago and now is on sale right now with a fantastic $8,800 buy opportunity.

My overall idea doesn’t change yet, read it carefully and see that I mention waiting for a dip to get a great entry in for a long position. This is that moment, make sure you don’t panic sell and accumulate bitcoin for this great price.

Also I’d like to take the opportunity to thank the TradingView team for adding this idea to their Editor’s Pick. This is a great achievement for me, and very encouraging for people relatively new to the platform like I am. Thanks everyone who has been supporting me a lot with their likes and their comments over the last few months!
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I thought Bitcoin was digital gold. Why would it drop in times of turmoil? Why would it rise on good news? Is it a company? Does it produce something or have a GDP?

Waiting for a plausible explanation ...

Got to say. Pretty sick of all the fake pleasantness and a.. kissing here. Hardly any meaningful analysis and a whole lot of payed subscribers recruiting.
+31 Reply
@Svetul4o, you mean on tradingview in general or my ideas specifically!?

A possible explanation that both actual gold and bitcoin (if we assume for a second here it's "digital" gold) dropped during Corona is that people are just taking their money out of the market in general. People get scared and don't want to have their assets into investments, but rather have them available in liquid form to make sure they can provide for their families if something really serious happens.

A second explanation for Bitcoin is that crypto still has a status of "fun" or "experimental" more than "serious investment". When the world has serious turmoil going on, the priority of cryptocurrency investing moves to a lower place, making people take their money out of bitcoin and putting it in their pocket or legacy markets instead.

A third explanation is that there is a lot of profit to be gained if you put your money into the market after a big crash. People might take their money out of the safer investments and put them into the more risky investments knowing they can get a higher return there.

Curious to hear your thoughts!
+10 Reply
Svetul4o Trading-Guru
@Trading-Guru, All of this implies that Bitcoin is a speculative investment deriving it's price purely from faith. As is the case for most financial instruments at this point. So much for digital gold then.

I mean tradingview in general. I have a look at the profiles of most authors that I stumble upon and pretty much everywhere (including your profile) there is all adulation and thankfulness and zero critique. Even in your profile I saw a bunch of trades some of which that have went against you and there were obvious signs that your calls were incorrect or at least quite risky.
+10 Reply
@Svetul4o, Well, I must say you are right. There is not much constructive criticism, and many use it as a tool to create awareness of a trading related product. Apart from the occasional bought likes and spam accounts, I still think you can derive value from it. Just find the authors you do like, follow them and remember that you don't always have to be right to be a successful trader.

I will leave it up to you if you deem me worthy of such a follow :).
+9 Reply
FindTheSun Svetul4o
@Svetul4o, digital gold it is, because collectively human evolution drives further into digitizing most of its processes, so crypto ain't going anywhere, but it will evolve and it has to evolve fast before quantum computers will break it all. otherwise you can't neglect the fact that the whole global environment is becoming more and more digital. what you gonna do with your physical gold when no one will need it? it's the same question.
Svetul4o FindTheSun
@FindTheSun, That's a strange argument. Rare metals and all commodities in general are always needed to some degree in industry and every day life. From that point of view a digital dollar backed by oil (which it is) is more valuable than bitcoin. Currently bitcoin price is only a reflection of human greed. Back it up by any physical real world commodity and then it represents value.

Go ahead and digitize your lunch :)
+2 Reply
Talos_bot Svetul4o
@Svetul4o, I personally see the value in cryptocurrency throughout my everyday activities. I am based in the United States but work with an international team, and I am able to send and receive money from anybody in any part of the world in seconds with minimal fee or hassle. It is so simple that it's value can be ignored rather quickly, but that is a big deal, and it truly has simplified a lot of my work in IT.

The actual, long-term value of a bitcoin, I believe, is derived from the costs associated with producing (mining) one. The speculative, volatile value that we see bouncing around every corner of a chart is not the real value of a coin, and I think you would agree. I do believe, however, that the costs associated with mining one bitcoin acts as a (albeit weak) "central tendency" to the speculative value.
+2 Reply
Trading-Guru Talos_bot
@Talos_bot, That makes sense Talos, but I am curious though: it probably isn't actual bitcoin that you are sending. Especially if you use the word 'seconds' and 'minimal fee'. I take it that you're probably using Litecoin for this or another crypto currency but probably not bitcoin.

For sure we are all very early adopters still, and there is serious value in this space. It has gotten to this point already because of this, but the question that becomes what is the long-term value of bitcoin specifically. Why bitcoin? Why not any other cryptocurrency?
+1 Reply
Talos_bot Trading-Guru
@Trading-Guru, I should have been more specific, overall I was generalizing crypto. Bitcoin still has very minimal fees if you consider what the costs and hassle would be of same-day wiring of $2,500,000 from the US to Japan, for instance.

Blockchain technology is noteworthy as well, it truly is potentially revolutionary stuff. I don't believe the potential value behind blockchain tech has to necessarily reflect the price of a digital asset though, so I left that thought out of my original comment.
Phyloader Svetul4o
@Svetul4o, Something that needs to be acknowledged is that fiat currencies are also backed by something intangible. You may say they are backed by oil; but what they are really backed in is trust in the government. If the government is doing a terrible job and people lose faith in the government because the conditions within the country deteriorate, the level of trust goes down and the fiat currency looses its value. In the last minute when everyone realizes this the currency hyper inflates as it looses its value. But assume that months or years before this downward spiral takes hold you see indications that this may happen; you may remove holdings in that currency, its stock markets, its government bonds etc in favor of an investment that has global value decoupled from the economy of that single country. This is where you might put your money in gold because gold has hard value as an object that is not dependent on the performance of a government. Bitcoin might not represent a hard value as an object; but it certainly has value as a means of storing and transferring wealth on a global stage. It must be realized that at a certain point the value of anything government backed, as well as bitcoin, are based on trust and perception of utility. This puts bitcoin and fiat in the same boat; value based on perception of its value. When people loose faith in the value of a governments currency they may jump ship to another global store of value; as you will find is the case many people do choose to jump ship from fiat to bitcoin. You will find this happening in many examples from both South America and Africa. Take Venezuela as a case point; those who mined bitcoin there with cheap electricity prior to the economic collapse found their value holding or growing in size; rather than nose diving by thousands of percentage points. Where bitcoin exceeds gold in metric is ease of portability and transferability. A much greater percentage of bitcoins volume is person to person compared to gold; gold may be a store of value, but bitcoin acts as a much more fluid medium of exchange.
+1 Reply
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