Cryspo

The "already bottomed or close to our bottom" argument

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
Good day Traders

As mentioned before, no one truly knows where we will end up bottoming but 99% of traders will probably get rekt trying to find that bottom because it usually doesn't pan out according to market expectations, so better to be open-minded without being too fixated on a set bottom target because maybe that bottom is already in. We have quite a few reasons why bitcoin can and should capitulate below our $3k support, as explained in my previous posts, but would that not maybe be too convenient?

When we were still consolidating close to our $6k support, the market sentiment was generally bullish but the market had other plans. Now that we have been consolidating close to our $3k support, the market sentiment has been generally bearish with JP Morgan even throwing out $1200 targets, potentially so that you can sell right into the traps set by these market makers, who probably won't let the next cycle begin before enough people have either shorted to catch the next knife, or thrown in the towel after effective market capitulation. The question is, which of these 2 strategies will be used before reversing the general direction and trend of this market?

If market sentiment is generally bearish , I'm inclined to assume that this would be the perfect area of accumulation since there should be a lot of traders waiting for their bottom targets throughout the upcoming months of consolidation, while the market becomes range-bound, giving the market makers ample time to accumulate your btc while you sit all tethered up waiting.

Reasons why this might be either close to the bottom or already bottomed:

-MFI is now in the oversold territory on the monthly chart for the first time in bitcoin's history

- Weekly SMA200 held as support in 2015

- RSI sitting close to the same area of support as is 2015

- ADX and DI narrowing for a range-bound consolidation, similar to in 2015 before the next bull cycle

- Bitcoin bottomed at a 121.4 fib extension of the first wave of the downtrend, the same level in 2019 is around $3k

- Similar drop from the 2 cycles' ATH

- Similar drop from the previous swing high

- Major horizontal support around $3k on the weekly chart

- Total crypto market cap closing in on $100k which held as very strong resistance in the past, will it hold as major support?

- We could have a soft bottoming reversal process compared to the sharp peak reversal seen when we hit the ATH (see inverted chart to illustrate this and how we could be ready for a range-bound market after already having found a bottom)


Potential capitulation risks:


- ADX and DI show the same levels of strength of trend as they did in December 2014, the month before capitulation, with similar levels for ADX and DI lines. The + and - DI lines are narrrowing before the drop . This is definitely something to keep an eye on. Will there be capitulation within the next 2 months or end of bear market with gradual widening of ADX and DI lines? If the ADX and DI carries on playing out exactly as it did in 2015, then we might have capitulation first before the market goes range-bound

- Although RSI is sitting close to the same area of support as in 2015, this level is currently acting as resistance

- We have similar trend lines from the 2 ATHs where the price never broke above this major trend line until the next bull market cycle had commenced. This can mean that the next market cycle begins in May 2019 if we break above that area of resistance on the monthly charts, however, it can also mean that we have true capitulation in May 2019 if that trend line proves to be too strong

- A close below the weekly SMA200 would be unprecedented and could induce panic

Truth is no one knows but the signals will arise closer to crunch time so I'll be updating.

Good luck and happy trading!

Weekly chart showing SMA200, horizontal support and total crypto market cap:



Inverted scale showing a potentially soft bottoming:



The bearish knife-catching view:







This fits my narrative. Thumbs up!
+1 Reply
Very much appreciate your analysis, here. The Fib targets are quite similar, and since Fibs have played a definitive role in market movements, arguably over the past 36 months, at the very least, your comments have merit. Thank you for sharing.
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Cryspo SocialCryptopreneur
@SocialCryptopreneur,thank you, it's only a pleasure. It's true that these fib levels are key.
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Very good analysis.
Thanks for all your work
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Cryspo J3rk1e
@J3rk1e, Thank you very much :)
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We neither had a real capitulation candle or real round bottom so far. This shouldnt be it Set.
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Cryspo moviestar
@moviestar, not Set just another possibility. No one knows for sure and if anyone claims they do they're full of it. Capitulation is obviously expected but not guaranteed. Look at the inverse chart, we had a soft peak in 2013/2014 and a sharp bottom in 2015, yet we had a sharp peak in 2017, so not an exact correlation to the previous cycle. We also don't know what the next catalyst could be (for better or worse) especially when volume is low and the market is this thin.
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@Cryspo, another thing could be time spent below that downtrend line. if the last bear market should be any indication then we can see that we have spent about 4-5 months longer below that line.
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Cryspo moviestar
@moviestar, this bear market is taking longer than the previous one so difficult to compare time scales. If we do have a capitulation event, we might even find that we're range bound for the better part of a year before the event (which will probably happen when we least expect it, if it does happen).
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BTCUSD H4 Correction up. Checkout the idea detail's and all the update's for the complete picture.

BTCUSD D1 Long Term EW Analysis. Checkout the idea detail's and all the update's for the complete picture.

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