powderpc

Is the market revisiting $6000? Some reasons why not.

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
There seems to be a lot of apocalyptic talk about Bitcoin going back to $6k and this seems to be a potential confirmation bias that could lead a lot of people to miss out on yet another opportunity.

When everyone was screaming inverse Head & Shoulders with an expectation the market would just magically blow up again to $16k, the market was clearly running out of steam and a logical approach would have been shorting at the neckline with a tight stop at $12k. This would have provided great risk:reward yet nobody mentioned it. Unfortunately, I hadn't familiarized myself with selling BTCUSD pairs on Kraken so that wasn't even a consideration for me. But in retrospect, it seems so obvious and it would have been far more reasonable to short there than say $8700 or even $9800 when the market was already well on its way through the current move. If you look too hard for one thing to happen just because someone else says it will then you're going to completely miss countless other opportunities.

I can't even begin to list the number of opportunities I've missed because of questionable prognostication that's creating more fear than is warranted. I'll readily concede to being wrong, but my instinct has been to avoid following major TA "chart" people (on both web and tradingview) too closely and I can't even begin to tell you how frustrating it is to balance out fear of risk using objective methods while reading what appear to be overly simplistic interpretations of market price action that call for total annihilation in the market.

First, nobody is paying to the convergence of two major trendlines . This is reflected by the flattening of the 200 EMA and the very slight downward slope of the 50 DMA as it converges into what appears to be the exact center of these two major trendlines . This is a big sign. This midpoint is $8871. That should be considered a reference price for the market moving forward as we get closer to some breakout or breakdown of the lower trendline or a break back to test the upper trendline around $10k to $10.5k. A break above or below these trendlines will be significant, but it seems overly simplistic to think just oh we broke $8700, now $6000 is coming. That might leave you wondering what the hell is happening when the market is moving back towards $8871 or creeping along the lower trendline rather than taking a nosedive to $6k. While the $6k scenario can still happen I'm not convinced that it will based on basic understanding of the underlying market.

On the current downward move the market nearly perfectly bounced off the lower trendline from March 2017 for both Litecoin and BTC . Clearly, there is awareness in this market of this price level.

Also, when the previous dip to $6k was hit the previous high was nearly $20k. That move from $20k to $6k eradicated MANY weak hands. That was a 70% draw down. On the current move we've only moved from $11800 to maybe $7.7k, or 35%, with a move back to test $9.8k in the middle. There aren't nearly as many weak hands ready to capitulate at this point when considering that price is only 20% below the midpoint of the ATH . Also, trading volume was well over 70% higher on the last dip. Volume has decreased considerably, which again suggests that there are fewer market participants at this point who have entered based on pure speculation (i.e. FOMO) rather than some sense of strategy or belief in the technology.

Google Search trends also reflect a bottoming. Projections for this week are about 10% less than the last two weeks which were the same. This is significantly less than the 25-50% dips that had been seen prior to the last two weeks. Tom Lee is calling the bottom on the Bitcoin Misery Index ( BMI ) and an ex-CFTC chair doesn't think enough institutional capital is in the game for this to be anywhere near a "bubble".

If price goes to $6k you can imagine the bounce will be violent and fast which makes it even less likely to happen.
Comment: correction: *paying attention to the convergence"
Comment: However, should we see additional negative triggers in the market, such as a big regulatory action or a hack, then this could spark a market panic. The breakdown of the inverse H&S was hastened by regulatory and security fears but those were always "there", some people just didn't price them into the market.

We could see another dip back towards $7.5k which would be about 9% lower than the current price of $8180. And should this not be supported, then that would be really bad, but given the conditions I've described, I think too many people will see an opportunity at that price level for there not to be a strong enough bounce to keep the trend alive.

The bounce off $7.7k was hard and fast and those who used indicators to enter there would have been rewarded. All this talk of $6k made me incredibly indecisive to the point where I almost need to tune out completely when I'm trading.
Comment: I have to correct myself when I say the bounce off $7.7k was fast because the move through and back above $7.7k probably played out over 4 hours. So there were people watching for this 4 hr RSI and deciding that was a strong enough signal that the market was at a "bottom" over the next 1/2 day or so.
Comment: Also, I'm pretty convinced some whale(s) manipulated the markets to shake things out of a sideways range around $7800 so that idea could discount the possibility that the market was actually bouncing off of a trendline rather than a bunch of naive bots being driven to placing enough orders to move the price during that timeframe.
Comment: 4 hr RSI suggests we go lower, but probably 9% lower to $7.4-$7.5k where support appears to be strong. Should this level hold or show a bounce over 4 hours then we could see a bounce back towards the $8871 midpoint / 50 DMA / 200 EMA zone though this will probably happen with volatile sideways price action.
Comment: I will concede that Omkar and quite a few others predicted that XMR would hit $200 and that this "bear flag" would lead to a further drop.

The reason XMR hit $200 is mainly because BTC is driving alt price action. ETCUSD has been oversold like crazy yet it's still falling off a cliff every time BTC takes a big dive. LTC appears to have its own price action but it's still mostly correlated.

The bear flag definitely seems like it could have been driven by fundamental sentiment shift such as Tom Lee's BMI news spreading as well as the ex-CFTC chair saying that Bitcoin wasn't a bubble. Clearly that wasn't enough to send the market back towards the downward trendline but that kind of price action can be driven by RSI strategies as well as moving average positions which happened to be right where the bear flag sat, in between the 50 DMA and the 200 EMA.
Comment: If you take the recent top, which was $11800 you get double the recent bottom at about $5900. The midpoint of that is? $8850, roughly the midpoint of the convergence between these two major trendlines.
Comment: One of the worst mental traps is the gambler's mentality where you take extra risks because you made a mistake and you want to "correct" your mistake and then at other times when it's time to take risks you're too averse because of some other mistake. Referencing a written strategy sounds so simple yet you're so much less likely to go and do something stupid if you just keep referencing your own strategy and sticking to it as conditions warrant (assuming you have a history of winning trades with this strategy).
Comment: Jesus I f'ed myself again. I impulsively bought back XMR ought of FOMO, then proceeded to draw myself a tiny inverse H&S and bull flag on the 15 min chart and thought ok this doesn't look like such a dumbass thing that I did.

Then I saw this crazy order book and I just decided screw it and bailed just like that and of course screwed up yet another trade by first doing something I hadn't planned and then reversing out of it in a way that didn't make any sense either.

Sometimes you just have to walk away and do something else for a while, especially when you're tired.
Comment: The price action I've been seeing this morning has been incredibly strange. I can't really explain it.

However, it seems like this kind of news:
https://www.coindesk.com/3-south-korean-...

could be the sort of thing that freaks people out and that's the systemic risk in the market that I've discussed.

How much of the market is being propped up by bad actors? We really don't know until we clean it up. And if there's one thing that will send crypto back to $3k-$4k it would be major regulatory shocks such as the one described above.
Comment: If one takes a longer term view of the market say 6-8 months out with an expectation that we might see some negative price action due to shocks in the next 3-4 months followed by a recovery based on an assumption that the market are self-regulating better and new rules create more transparency and less fear from market participants then you could argue that in 12 months price levels could easily be double or triple the current level. That being said, if this is the scenario that plays out we're likely to see a replay of 2014 which would result in things getting much worse before they get better.
Comment: This weak and rapid retreat from $8400 is concerning as it suggests entirely speculation or bot driven trading. Volume is increasing still which could keep prices going sideways for a bit though a decline back to $7700-$7800 in the next 45 - 90 minutes could trigger a buy signal for the 45 min RSI with a 4 hr RSI signal in the next 4 hours which would suggest a possible double bottom forming...
Comment: ETC seems to be trading a lot less correlated to BTC than I would have expected. Again, I entered yesterday based on reliable signals and bailed out of fear and now I'm paying the price...
Comment: This should seem obvious but if your chances of winning a trade seem like 50/50 then you don't do it because it's not worth the risk.

When you've identified clearly favorable parameters for entering a trade then you shouldn't worry too much. At the current price level with the current price action with tight support and resistance the market could breakdown or breakout at any moment but you're better off waiting to see which direction it goes rather than wait to see whether you end up stuck in the wrong position when that happens.
Comment: After watching the John Oliver piece on crypto I can see why mainstream acceptance of crypto is probably not going to happen for a while but hopefully that's a wakeup call to all of the crypto bros that cling to the ridiculous idea that crypto represents some revolutionary technology that will change the world. There's technology there but so far we've got mostly gambling and a lot of hype.
Comment: Price has now bumped up against the upper channel trendline and suggests $8050-$8100 will be the lower bounds while the descending trendline will be the upper bounds of this range that will start to tighten.

Moving sideways out of this channel could open up sell pressure for a move back towards $8700.
Comment: Price has stuck to $8137.02 for 15 straight minutes now. Volume has fallen off a cliff. The market looks like it could break out of this range soon.
Comment: With the 1 min candle crossing the channel line we could start to see some good price swings like last week when almost an identical trend followed an upper channel line...
Comment: With pretty obvious RSI convergence happening this guide does a good job explaining how to trade it:

https://www.luckscout.com/rsi-divergence...
Comment: I market bought into this momentum breakout that was predicted by the RSI Convergence. I wish I had bought $100 cheaper when nothing was happening but I was working on something else...
Comment: I market sold at $8502.99 and market bought at $8268.39. I wish I had a bigger position but I just entered a number to get in fast.

With another trade that should've worked out better I ended up doing 1.6% in maybe 30 minutes total of holding a position. So not bad...
Comment: I was also getting ready to enter a trade in XMR but I forgot about it on the order screen when I went to take care of some other stuff but that one's more of a buy and hold.
Comment: Now that this break above the channel line has happened I expect to see a bit more volume and volatility, and possibly a retest of the channel line which happened the last time we saw a big dip and a break out of the upper channel line.
Comment: Unfortunately I've been laying off Litecoin just because I don't trade it much and don't have a really solid sense of position sizes for risk management purposes (i.e. it's much easier to think in units of BTCs than LTCs) so I didn't jump on that. If you were in at $160 you could've made 3.75% in less than 10 minutes.
Comment: The Litecoin trade would have been one that expected a correlated move of the BTC RSI Convergence trendline breakout because this pattern obviously isn't relevant to Litecoin.

That being said, BTC and LTC face similarly bearish resistance levels ahead so better not to go too long in this market until we're clear of this bear flag.
Comment: What's notable is that ETC and XMR both had really strong bounces off the recent BTC low which suggests alts get oversold and overbought more on really big BTC price moves but overall still show mostly market activity that responds to indicators and signals. ETC was showing way oversold and bounced almost 24%!
Comment: It seems like this short term trend is testing a lower trendline that started around $7700 and intersects around $8100 while also being pulled by the top of the descending channel that would intersect around $8000.

Order books would suggest trading will stick to a range of about $7750 to $8250. This pattern similar to last weekend where a short term double bottom led to a bigger reversal.

Medium duration RSIs seem to indicate a move lower in the 1-8 hour timeframe. This would coincide nicely with a bottom around $7700-$7800 which would happen to be an intersection with the upper trendline of the descending channel around 8 AM - 12 PM EST.
Comment: In retrospect I wish I had shorted BTC at $8570 with a tight stop of 8625 but I was too tired to think clearly and thought the market could move slightly higher before pulling back.
Comment: As expected, this short term trendline had some pull on the price until the intersection of the descending upper channel trend line with the larger March 2017 trendline pulled the price to about $7500 where we saw a pretty sharp bounce of 2.5+% and now a slow creep along this March 2017 trendline.

On the 1 day RSI we're not likely to see convergence unless we get a lower low, which would be less than the previous low of ~$5900 so I don't expect a move like this to happen so quickly.

On the 4 hr RSI the chart is strongly suggesting convergence with MACD also suggesting it as well. If RSI turns around sharply upward that could be a strong buy entry for a shorter duration trade.

If we consider this pattern a huge symmetrical triangle, we are now on the 4th touch and we should consider whether a breakout will happen to the downside. Should price start moving swiftly below $7500 then a sell order should be considered. Currently, just looking at the order books, there is MASSIVE support below $7500 so this remains a risky option.

Given that the symmetrical triangle came off of an ascending trend the typical move will be a continuation of that previous trend. This would be consistent with the idea that RSI convergence is signaling a bottom.

Then, in a completely hypothetical scenario, if we get a move back to $8500 in the next day or so followed by a move back to $7800 that would be a really strong sign that the we've bottomed as it would be an inverse H&S with 2 touches off the March 2017 trendline. That's more of an imaginary possibility but if a sharp move above $7.7k through $8k occurs then this would be a highly plausible scenario given the very thin order book up to $8.5k. This is a scenario that should be watched based on RSI signals.
Comment: I should have said the 4 hr RSI convergence is signaling that we're close to a bottom in the short term. That being said the 1 day RSI still hints at a bottom that requires another big dip below $6k which would blow up the symmetrical triangle idea and probably cause a death cross to form and all hell will break loose...
Comment: I was going to say before the price tanked down to $7600 that it looks like the trading range in the near term will be between $7600 and $7750 though this touch off the big trendline could lead to some sideways price action.

A big momentum move to the downside seems highly unlikely given that overall volume is low and declining and it's Saturday going into the middle of the night in the US and Sunday morning in Asia so volume likely won't be high enough to break this huge support between $7500 and $7600.
Comment: Should we get a piercing pattern candlestick in the next 2 hrs on the RSI close then this could be a strong buy signal to the market which would open up a move back to $8k.
Comment: Price is on track for a breakout having just popped to $7750. Order books suggest a trading range of $7600 to $7900 now.
Comment: Another potential breakout trigger would be stop hunting shorts that have overeagerly anticipated a move to $6k too early.
Comment: A close of roughly $50-$60 higher in the next 1.5 hours would indicate a piercing pattern with both MACD and RSI Convergence on the 4 hour chart. This will be a strong buy signal that could be something sophisticated algo bots will trade on and other bots picking up momentum signals and other indicators may trade on it as well.
Comment: Since the breakout didn't happen on the 4 hr close I closed out my position to wait for a better entry level after the breakout.
Comment: We're getting kind of a broadening bottom or megaphone pattern on the 5 min chart which suggests a growing battle between competing ideas about price direction.

MACD and RSI Convergence has continued to be strong on the 4 hr chart over the last 10 days and this megaphone pattern has now touched for a 7th time off the bottom.
Comment: It's still too early to tell what's going on in this market but alts are clearing imploding and so many people called ETH taking a nosedive that I should've been considering that as a short at $600.

In some ways a consolidation back to BTC could be fundamentally better for the network in the short term though there are still a lot of mixed signals being set especially since scaling is still not resolved.
Comment: Google Search Trends closed a weekly number yesterday March 17th and the new numbers for the past week show a very strong bottoming with "19" for the last 3 weeks in relative search popularity for "Bitcoin."

This is slightly up from what had been showing as 20,20, 18. This would be a positive sign that Bitcoin is hitting a bottom. An increase here would be a favorable sign. Overall, crypto is still in a bearish trend so it's too early to tell but the overall regulatory landscape seems positive in that blockchain and crypto are both being seen as innovations that should be cultivated rather than stifled.
Comment: https://www.coindesk.com/crypto-featured...

Congress dubbed 2017 "the year of Cryptocurrencies" in a 2017 Joint Economic Report. It seems premature to declare crypto in a bear market when the overall equity markets are still showing a fairly strong risk appetite.

This cool article really emphasizes the power of public blockchains, even if this particular application doesn't necessarily influence coin prices:

https://www.coindesk.com/security-settle...
Comment: The big move from around $7600 to almost $7300 and back to $7500 has come at an interesting time period where price is moving close to both a new descending channel and the old descending channel. The bounce in the 4 hr suggests a close back into the new channel while touching off very close to the old channel.
Comment:
Comment: In addition to a new descending channel from March 8th a short term descending channel from March 16th is now clear and a close below the ascending trendline from March 2017 could lead to further losses in this channel.

Given the short duration nature of this new trend (from March 16) the pull of the larger trendline combined with a continued strong indication of RSI and MACD convergence would suggest that the market is close to being oversold despite a significant amount of resistance ahead.
Comment: While we can read bear flags into this chart there's a lot going on in the market so you have to take into consideration the strongest signals and fundamental qualities. With several recent reports of large trading firms going into crypto and Bitcoin it seems to me that there's far more demand ahead for Bitcoin due to its attractive nature as a speculative asset and as more regulatory considerations are put into place globally we'll see an overall stabilization in the market.
Comment: There's still quite a bit of charting that suggests another move lower and this seems reasonable, but at the current price level, the risk:reward of trying to profit off a draw down seems extremely poor.

If the target is $6k, then that's only 18.9% gain compared to a move back to $8800, which would also be 18.9%. At 1:1 it doesn't make sense to bet on it.

Given that overall market signals (BMI, Google Search, confirmed transactions, 4 hr MACD/RSI Convergence) suggest a bottoming, it seems more likely that in an absence of negative market shocks we should be seeing an intermediate duration recovery from somewhere between $6k and $8k. It could be that on a 1 day scale we're not at the bottom yet but it seems premature to call a straight shot to $6k.

The optimal short would have been off of the previous bear flag at $9.8k or off the inverse H&S neckline around $11.7k. At $7.4k the risk reward has become unacceptably poor.
Comment: After having said the previous statement, the more problematic aspect of a further dip would be an increased probability of a death cross, which could signal an extended bear market that keeps prices depressed or pushes the market to another low below $4k.

If that's the expectation then reward:risk improves to 46% vs. 18.9% or about 2.43:1.
Comment: Given that Bitmain basically controls the market for Bitcoin mining there would be a logical expectation that despite their attempts to divest the main network into Bitcoin Cash they would understand the consequences of allowing the market to dip back to $6k and triggering a death cross.

Given that they supposedly have billions of dollars to influence the market one would expect some kind of "market intervention" here at this critical price level. Then again, maybe that's asking too much.
Comment: Volume has been increasing over the last day which suggests an inflection point is near.
Comment: This bear flag has proven to be much stronger than I expected and the market is not showing any confidence in current support at $7300.
Comment: Having seen a 4 hr candle close below the March 2017 trendline I would be getting ready for a short on a breakout lower. Current support appears strong at $7300 but given that there is no momentum it suggests that this is a manipulation. As soon as the 4 hr appeared imminently bound to close in the sharp descending channel formed yesterday demand vaporized from above $7400 and huge buy walls appeared between $7300 and $7320, which seems to have prevented a meltdown in price.
Comment: However, this again might not be a trade worth pursuing since the order books are showing insane support between $6k and $7.3k. It just doesn't seem worth the stress unless there was a clear momentum breakout. Given this level of support it seems that there's a very strong desire by market participants to reverse prices well before reaching $6k.
Comment: If BTCUSD breaks out above $7700 then this will be a positive sign. If it can't pull back into the March 2017 trendline by the close at UTC 0 (~8 PM EST) then this will be a strong negative signal to sell.

Should the market pull back into the trendline during this timeframe this could be a short opportunity with a tight stop given the current expectations. If the price is well off from the trendline then I would wait for a momentum break out lower.
Comment: My expectation is that volume will fall going into the UTC-0 close as many participants will adopt a wait and see approach to whether the market is showing any signs of life and price will stay sideways in the $7350 to $7400 range.

We'll wait a few hours and see what happens.
Comment: The current price action seems to strongly reflect a confluence of many different market trends. This seems to creating both strong negative pressure and strong positive pressure, assuming we believe the volume reflects "real" market activity.

The negative descending channel started at the ATH shows a current top of $10600 and a bottom of $4600. That puts the midpoint around $7600, which explains why the market has been moving through this price level quite slowly.

Also, the March 2017 trendline is providing strong support against several bear flags and the downward slope of the 50 DMA.

Since BTC essentially serves as the backstop to the entire crypto market, it makes sense that money is rapidly flowing out of altcoins and back into BTC. If altcoins have any chance of a reversal they need to consolidate their strength in BTC.
Comment: Well I went skiing rather than spend my day staring at the screen waiting for this breakout figuring it wouldn't happen until later so I missed the trade. I probably should have just cut my position size in half but the risk was too high to sit on anything other than a losing position that had some longer term potential so in the end I did make some money in XMR that was bought at $188.

I'm not sure if I noted something about ETH but it was very noticeably oversold and I figured if BTC broke out then ETH would have an even better move and with BTC moving 13.5%, ETH moved 17.6%. LTC did about the same as BTC from its low.

This move could have had something to do with shorts getting closed out as well.
Comment: XMR moved even more than ETH at around 19% from its low.
Comment: I would expect that those who tried to short BTC etc. and having been completely destroyed by this breakout will probably think twice about taking an overly aggressive short strategy that wasn't based on sound understanding of TA and fundamentals.
Comment: I thought this kind of move was possible but now that it's happened we're looking at a real possibility that an inverse H&S forms with an $8600 neckline. A short here with a tight stop could be closed out around $7750-$7800 depending on how the RSI and order books look.

It would be best to look for an RSI Divergence once the $8500-$8600 range is achieved to help confirm the likelihood of a dip back to $7750-$7800 to form the right shoulder.

This is an extreme hypothetical so it could turn out to be nothing but it seems a $100-$125 risk would be worth a $700-$800 reward. Reward:risk of 5.6:1.
Comment: The price has moved near a March 14 2018 trendline that seems to be affecting some price action in the 15 min chart.

Comment: Should we see a move back to this trendline around 8600 this could be an optimal short opportunity. A tight stop or a wait for a breakout downwards would improve the risk:reward.

$8600 appears to be the head & shoulders neckline so capturing profit on a move down would mitigate much of the risk in buying back in at the $7700-$7800 level and allow for a slightly more generous stop.

Should the move down off the trendline fail to materialize or should a sharp move happen above the trendline then this opens up a move to about $9k. A break above $9k would open up $9.5k or what appears to be a trendline formed between the February low and last weekend's bear flag.

A move above $9.5k starts to run into a lot of resistance between $9.8k and $10k which is right around the main descending trendline off the ATH (aka the upper channel line).

All this being said if we are in a huge symmetrical triangle then the predicted direction to breakout of the triangle is up as a continuation of the previous bullish trend.
Comment: Any of those numbers thrown out above $8.6k could change depending on the time period that price action happens so it's all low probability.
Comment: Also, if neither a strong move up or down materialize then we could be stuck in more sideways price action for a bit as the market waits for some trigger to influence the price action. Order books suggest a range between $8171 and $8465. 15 min RSI suggests a divergence if we see a move to $8460s ... though a bull flag seems to be taking shape so the flag might be a more favorable pattern to consider.
Comment: On a 1 day scale it seems that price is bumping off the bottom of the 200 day EMA. On the 4 hr chart it seems that after the breakout the price has been moving up towards the 200 day EMA but has yet to sustain a crossing, which would be above $8500.
Comment: I took a shot at going short ahead of the 4 hr candle close at $8550 thinking I could guess the direction based on a candle close right at the trendline but simply being at the trendline seems to have been a bullish look so I got stopped out. The price has been tracking the trendline for a solid 16-20 hours now but I suppose simply following the trendline upwards provides some assurance that eventually we'll bump into the upper channel trendline at about $8900.

So in the absence of any other major influence on price we'll probably continue to see a creep up but I'll likely just wait and see since the market seems desperately overbought at this point in time. Probably not a bad time for intraday trading.

My biggest confirmation bias is expecting another huge move right after a huge move when normally the market takes a few days to settle down and consolidate. Given the lack of a clear pattern at this point it seems like we could be going sideways for a few days, and based on current support, perhaps we'll see a move back to $7.9k, which would be consistent with a possible inverse H&S. This would line up with a move on Friday March 23 and a bounce off the March 2017 major trendline, possibly in the evening USA time, which would be consistent with how major price action has been playing out lately. This is completely hypothetical and more fantasy than prediction.
Comment: If this 4 hr candle turns red I'm going to be super annoyed because it sucks to be right but get your execution completely wrong.
Comment: $8600 was my original target for that trade and I would have been able to stick with it had I been slightly more patient but the 4 hr candle close is about as good a place as any to target a big move even if you're guessing on the direction given that we've seen 3 consecutive ascending green candles. Sometimes if you get caught in a false positive move at times like this.
Comment: The finality of missing a big trade that I had been waiting days to get into is probably bugging me because when I got back I could've caught the bounce at about $8150 but I was too tired to think clearly at that point even though I already had high confidence the market would be testing $8600 for the near term. A small position here would have been good risk:reward and at least given me a bit of a bonus.

One of the biggest problems with following a 24/7 market is mental fatigue. Especially if you're taking time out for family and other healthy things and miss an opportunity. But this is a good lesson in planning written strategies for when you're not able to think clearly. I should've already thought about what I would do if the market started moving while I was out. Half the time I'm skiing I'm carrying an iPad Pro so that I can trade but you can't really enjoy the time you spend "not working" if you're still trying to work.

That being said, I've missed quite a few big opportunities the past few weeks and I have confidence the market is not quite ready to settle down into any particular trend especially if this big sym triangle is playing out as I've been suggesting. A bullish move above the downward trendline will take the market back to FOMO price levels.
Comment: At this stage with regulatory risk developments, there's still a lot of other shoes to drop especially when it comes to ICOs and exchanges so it wouldn't be wise to take a big flyer on going long after a 16% positive swing but I'm sure those who were expecting the market to fly towards $6k probably feel pretty stupid right now and will be more inclined to consider a long position if an inverse H&S seems to be forming. This would be a strong sign that the market is reversing and could break out above the downward trendline.

That being said, if there's some other trigger timed with a move back to the ascending March 2017 trendline then that would be very bad timing and could trigger a panic back to below $6k.

At around $8500 we're still below the 50 DMA so a slow creep towards $9k, which is about where the 50 DMA seems like a reasonable trend.

Almost as soon as I said that the price fell from $8540 to $8415 in two seconds.

Guess I should've kept my short...
Comment: The idea would have been to go short while buying dips to hedge my short so that I could take profit on the way down and reduce my overall exposure without having a tight stop.
Comment: Looking at my mistake here:

*the timing of my call was off by about 1 hour
*I probably should have set a broader stop, like $8650, which would have been my original stop if I had been patient enough to wait for $8600 in case we saw a false positive
*Ultimately, I let impulsive thinking push me into a position that was slightly off and being slightly off threw off the risk management enough to force me out before seeing any big risk.
Comment: Accidentally erased my last comment...

Was going to say that:
1) reward:risk not so great now for a short at $8400 so better to wait for a move back to the trendline and a combination of some indicators before trying again
2) It seems likely we'll get sideways price action for a bit though order books look pretty thin in the ASK so I still wouldn't be surprised to see an overall creep towards $9k. Getting past the trendline will be key.
3) 15 min 50 MA and 15 min ADX suggests this positive trend is running out of steam so we could see sideways price action between this 50 MA (15 min chart) and the trendline as the 50 MA flattens out.
Comment: Ok, well I guess I was right ... we just went from $8550 to almost $8200 in less than 30 min. That would be about -4%.

I have to go and bang my head against the wall for screwing up yet another winning trade...
Comment: This is probably where I'm going to cut off the commentary on this idea since it's more or less confirmed that all this talk of going straight to $6k was totally ridiculous.

At this stage it would be worth considering some alts off this dip as we might see some sideways price action that could see some good intraday opportunities. In general, XMR and ETC have been trading with decent volume and generally look oversold.
Comment: I'm adding some more comments since there's no compelling evidence of a new idea quite yet.

After these somewhat predictable moves off of 15 min RSI you usually get a calm period where you can make some money trading 1 min RSI moves since price action typically tends to go sideways.

Of course, this is usually poor risk:reward since you end up holding the bag if the price action doesn't hold up for a long enough period.

I wonder if there's any data showing whether this strategy works...

Usually if I go into trading 1 min RSI I end up taking about 1/4 the position size I would normally trade with on expectations of a bigger trend.
Comment: With that being said my experience trading like that has been poor. It's just not worth the effort. I spent a solid full day trying to trade a sideways market and realized very completely that I will never win against HFT algos and that it was totally pointless.
Comment: If 1 D ADX reverses off a low peak below 40 this will be a strong indication that the negative trend is flattening, i.e. bottoming out. The timeframe for this to happen could mean weeks for confirmation so it will be useful to look at other timeframes though all other timeframes have already suggested a shorter duration bottoming out as evidenced by the strong breakout on Sunday.
Comment: 4 hr and 45 min RSI suggest that in the near term the market is overbought and likely to come down a bit before moving higher. At the moment, price is almost exactly in the middle of the ascending channel that was recently formed with a top of about $8600 and a low of $8150. That puts the midpoint at $8375 and GDAX is trading at $8355 though we were at $8375 only about 5 min ago.

At this price the downside risk of going to $7.7k isn't really worth the short term upside of hitting $9k. This is about a 1:1 risk:reward trade.
Comment: 15 min RSI suggests we could see some intraday traders pushing back to $8600+, i.e. the trendline, which would again be a potential opportunity to go short. I haven't really thought clearly about the timeframe for all of this though using the last cycle as a model we might see a move in the next 2-4 hours.

Since the 4 hour candle closes in about an hour, there could be a lot of price action around the 1 hr and 2 hr candle closes depending on price action. I could see a big move happening before or after one of these candles close depending on whether the price fails to get back to the trendline.
Comment: Based on the big dip we're seeing right before the 1 hr close it seems that the 1 hr chart is driving some price action as RSI indicates we're overbought and price action has not been favorable for a move back to the trendline.
Comment: A break or candle close below the bottom of this ascending channel could be a strong sell signal. But if price doesn't get near that level before we hit the dead zone after hours (~7 PM EST) then maybe not a lot happens though with HFT bots you have to watch volume trends to get a better picture of market action.
Comment: If we see a move to $8200 then I'll start to feel more confident about trading a move between $8150 to $7750ish... That would be up to 4.9% ... and then if you buy that dip or take profit on half then you'll be well hedged for either way.
Comment: After screwing up my short at $8600 that might be an even better risk:reward trade idea. I'll have to think about how to execute this properly based on timing and signals and whatever...
Comment: After looking at my 1 hr and 2 hr chart I'm realizing this lower channel line might be drawn wrong and the target for this trade might be more like $8250.
Comment: A lot of signals suggest this price action is running out of steam. We now see much bigger resistance at $8400 in the order book than before. A sharp break below $8250 could be a good target. Still need to figure out the details of how this setup should be traded.
Comment: On the one hand I could target $8400 with a tight stop rather than aim for $8250 but there's strong support showing at $8300 so it would be more reliable to wait for a break below $8300 or $8200.

Price action has really broken out above $8400 so that seems to suggest on 1-45 min charts that this lower channel is holding up. For now.
Comment: 4 hr candle closes in 40 minutes or so and a move back to the bigger trendline / upper channel line would invalidate my other trade and put the $8600 short back into play.
Comment: The 4 hr chart still looks overbought so a failure to breach this trendline sometime before the 1 D close could trigger a sharper reversal than we've been seeing though I would look at changes in order book/volume for more confirmation. We should know more in about 40 minutes.
Comment: Someone just market sold 17.84 BTC on GDAX so that's not a good sign...
Comment: Still, with this kind of support and resistance on either side of the price trying to predict the market would be like trying to break up a fight between two huge dinosaurs... Not really worth it...
Comment: This could get ugly... but I'm just going to watch.
Comment: It looks like something big is about to happen based on how tight the trading is getting.
Comment: Order book says we're going down and literally no one is lining up to buy.
Comment: Saw a market sell for about 12.2 BTC and a market buy for 6.9 BTC. Doesn't seem like a lot of big selling overall, assume pretty balanced right now based on price movement.

A market buy for 11.9 BTC ... 4 hr candle closes in 20 minutes. We'll see if anything happens. Seems like the market is just stuck in the middle of this price action right now.... Probably best to go take a break...
Comment: Volume has been increasing.
Comment: increasing on a 24 hour basis.
Comment: Coindesk just announced a negative piece related to France and crypto but really who cares about France? It doesn't really change much.
Comment: Say goodbye to IOTA:

https://cointelegraph.com/news/ibm-revea...
Comment: This IBM blockchain device is pretty interesting. Say hello to the Matrix...
Comment: This is around the time I get bored since there are no clear trades and the 4 hr close likely won't signal anything so we'll just be looking to the next 1-4 hrs for some direction.
Comment: It seems like the 1 min RSI HFT traders were able to push the price up though now we're seeing a real jump in volume.

On a side note, Pantera Capital just published a thoughtful piece on crypto and whether or not we're talking about Pets.com . A very smart piece.

In light of the idea behind IBM's DLT tech cryptocurrencies seem EVEN more viable and relevant since enterprise adoption of crypto promotes a completely different agenda than that of public blockchain. Public blockchain is about freedom and creating systems that can't be readily dismembered by some centralized body even with a coordinated attack. That being said, we're still at a stage where the system could be broken rather easily due to design flaws.
Comment: I'm trying to paste English into this box and Tradingview think it's some other language and rejecting it. How stupid...
Comment: I guess trading off of 5 minute RSI and buying in at the bottom of this short term channel would have generated a couple of good trades today though with a lot of risk. The short call at $8600 would have been very low risk if you took some or all profit at the bottom of the bounce. A better setup would be holding the short position with a bigger profit target and taking an equivalent long on 5 min RSI oversold indicators.
Comment: That would preserve your profit in the short even if you ended up getting stopped out.
Comment: In retrospect, looking back at how I messed up my trade prior to the big breakout I should have set stops lower than when I impulsively exited or just held the bag knowing my overall risk:reward was still acceptable over the longer term. The week before I wouldn't have set stops at all since my usual practice has been more tolerant of risk.

Since I was already holding a few bags on XMR And ETC I've been reluctant to take more risk than I need to though I made other mistakes with those two positions.

If I had set lower stops then I would be limiting my losses but not creating a scenario where I could completely miss the breakout that I had been anticipating for 4 days. It's like I did all the work and then overreacted right at the end.

In general, without a clear exit strategy to manage risk I just winged it thinking I would still be able to catch the breakout later with less risk. Having a stop would have been a much clearer risk management strategy with clearly defined risk:reward.
Comment: One thing I failed to notice is that the intersection of the current trendline (the upper channel trendline that extends to last week) with the larger descending upper channel trendline lines up perfectly with the midpoint of this huge sym triangle.

This doesn't seem like a coincidence but the way this pattern is unfolding is ridiculous...

So if we don't see a dip lower and just a slow creep towards $8900 or a breakout above this trendline then that would make sense too though a move back to this trendline with an inverse H&S formation would make the reversal much stronger.
Comment: Another blown trade was not buying ETC when it hit my target of around $14. It would have been such a small trade anyway and the risk:reward was good that I should've done it. That account though already had a few positions active so I was being more risk averse than necessary since the additional ETC position would have still been much smaller than anything else. It would have been an easy 27% gain with probably a 10:1 reward:risk over the longer term.
Comment: Looking at the 1 D chart the 200 EMA clearly has had a strong pull on prices the last few days with a lot of touches.

Also, based on the 1 D chart the possible inverse H&S doesn't looks so promising. It's sloped kind of weird and the timing doesn't seem to line up.

It would seem more natural for this current trendline to continue pulling price towards the intersection with the descending upper channel trendline that hits the midpoint of our sym triangle. It might be worth going long on about a 1/2 to 1/4 size position from normal given the overall 1 D perspective.

It seems that 1 D and 4 hr charts are at odds with there seeming to be a relatively good chance that we'll see a bigger dip in the next day or so. 1 D hasn't signaled a bottom so that's a big concern since RSI convergence would suggest a move to below $6k. Since we're just sitting in the middle of this range I'd rather just wait.
Comment: Thinking back to the short call at $8600 that seems now more like coincidence or luck rather than any kind of forecasting.

I associated the neckline of a potential iH&S at $8600 and that happened to be around where this ascending trendline was hitting a lot of resistance.

I did get close with the timing but overall that trade probably still makes sense given the size of this channel between $8600 and $8250 and the overall risk:reward.
Comment: It seems like on the 2 hr and 4 hr charts the price is barely hanging on to this trendline now and a close below it could trigger more negative pressure.
Comment: With that being said there is still massive support between $8000 and $8300. It seems like a challenge for anyone betting against the market to move the price though if price continues to fail to reach $8900 then there could be some capitulation. Volume has been declining which suggests bulls in the market are running thin.
Comment: I can see this going either way since heavy weekend price action seems like the norm it would make sense for the sideways price action to continue through Friday which would limit potential regulatory shocks.
Comment: Even speedskaters are talking about fixing exchanges and how wash trading is ruining the market:

https://www.coindesk.com/olympic-gold-me...
Comment: This piece discusses a few historical cases regarding securities law and it brings to mind Bitcoin Mining contracts which almost certainly violate securities laws. Genesis Mining has already received a cease and desist. If Genesis fails here then this will be good for decentralization of mining and smaller miners should see difficulty falling or rather catching up to price declines. This could be net positive for smaller miners.
Comment: One of the notable differences that also comes to mind between 2014 and 2018 is that back then the mining environment was entirely different and possibly even more saturated than now and miners pulling equipment offline may have had a larger role in influencing price than now when overall it is still mostly profitable if your power costs are low enough and your investment was made early enough. The returns don't make sense for new miners, as you would expect.
Comment: Looking at this support it seems like sideways price action should continue unless there's some chain reaction between markets where support gets pulled on one market due to some other whale dumping ... this is where the idea of a cartel/collusion could breakdown if someone cheats and tries to exit ahead of the others...
Comment: At $8392.86 on GDAX there is about $14.57 M in order volume above $7973.23. If this declines suddenly then the market / bots could see this as a sell signal which would create significant negative momentum. The opposite also would be true (i.e. a decline in sell order volume or an increase in buy order volume).
G20 fears entering the playground. Trade war gossip already beginning and a lot of punters are anticipating that some form of crypto regulation consensus will be announced. Tread carefullly for the next couple of days.
Reply
powderpc takaratengu
@takaratengu, I think the market will probably be regressing a bit after this big move so I'm leaning towards a short if $8500 is hit again. Coordinated regulation of crypto is inevitable, but overall governments seem to be taking a gentle approach, forcing mostly issues that will be good for the market since we live under the shadow of exchanges failing suddenly, losing funds, or manipulating prices. The positive take is that over the last 11 months there have been growing concerns about crypto and ICOs and the industry looks less and less like the dot com bubble than a year ago. There seems to be a consensus that the overall market cap of crypto, even at its peak, is nothing to be worried about in terms of systemic risk, so if we get a few months of stability where not much happens, this should be good for actual work and development within the industry, rather than just continuing a pattern of hype and speculation.

Even Bloomberg talks about BTC prices now! That would have been unimaginable last April. That crypto is becoming "normal" is a good thing and hopefully the tech will catch up a bit with the hype.
Reply
takaratengu powderpc
@powderpc, Thanks for the feedback. I reckon your're right and the crypto future does look to be improving as it moves gradually toward institutional acceptance. More guidelines, transparency, safe guards and accountablity through regulation...very welcome indeed. BTC does want to survive and it will. Accordingly prices need to be allowed to consolidate lower to reflect actual market sentiment. This would go a long way to reigniting the hope of the masses which has taken a heavy blow because of the last 6 weeks of artificial price inflation. Thats never led to pretty outcome... But, happy times ahead. Keep up the great commentary.
Reply
powderpc takaratengu
@takaratengu, and just in case you over read my optimism I think it's entirely possible we see another trip to $6k, but just looking at for example Bitmain, I see no one stopping them from taking all their profit and reinvesting it into BTC, much like companies buy back shares to boost stock prices. This is the critical point where they need to boost the price of BTC by sucking up some liquidity. It would make perfect sense for them to do it and save themselves from much greater pain in an extended bear market. Already, their X3 is looking like it might be a fiasco and the last three miners they've developed have all been aimed at low liquidity coins which really screw up the decentralization narrative.

That being said, Bitmain is a BCH shill so if they're so dumb that they can't understand that BTC drives everything in this market then maybe they really are that stupid.
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powderpc powderpc
@powderpc, I meant to say maybe they really are that stupid that they wouldn't collude in such a way with other whales to force a reversal here.
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Hi, I think 4000 is even possible!
The dip yesterday wasn't because of the whales (maybe a small trigger) but a correction to the JOES-fractal.
To find out about that, visit my charts and astonish yourself!
Reply
powderpc cryptopaatje
@cryptopaatje, I mention whales to suggest that a whale buy wall influenced the price from $7800 up to $8300. This was very readily apparent if you were watching the order books as about 200 BTC of volume kept coming and going sporadically while no particularly large buy orders were executed. I did not say anything about whales driving price down.
Reply
@powderpc, oké
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