There is currently a popular post detailing a potential drop for BTC back to 4,500. However, there is a lot of mistakes and errors in judgment in that post. The logic of the post postulates that we are about to drop back to about 4,500 because of a similar trend back in 2014. Before we take this extreme stance, let us think about a couple of things.
1) There is an idea in trading that past trends help predict future ones. However, the problem with the 2014 comparison is that with so much data on BTC is likely to find a similar match in the vast array of daily candles so far, but that doe not mean it is predictive. If this was the case, there would be no cytpo market because we would be able to predict the future with 100% certainty just by looking at the 2014 information.
2) The market is different from the one in 2014. With so much adaptation of blockchain technology and the spawn of other cypto currency alike, the market is not the same and will not behave the same. The cypto investors are new and the market is fresh.
3) The data chosen is biased. I believe if you dig hard enough you will find a similar pattern but do realize that there also may be another set of patterns that look just like the one in the 2014 post so far but increased instead of decreased. However, we do not hear about that piece of data because it does not fit the current prediction. Therefore, the data today is the product of biased selection errors and not representative of futures results.
Summary: The overall point is that history is history for a reason. Furthermore, history doesn't define the future. If this was the case, no market would exist and the world would be a little less interesting. Trends like the one today happen all the time but you just do not hear about it because, in the past, BTC rose at this point instead of dropping to about 4,500. If folks dare to redefine the past and invest soon, the reward would be great, a potential for 9,000. However, I would advise to steer clear or set a hard stop-loss 3-4% below current prices because craziness and panic can become a self-fulfilling prophecy. Please wait and look for changes in sentiments before investing.
Look back more into time. It is not an isolated incident. Back in April 2013 as well as in 2011. The bear is a standard in all parabolic markets. We will go lower for a while more and i will actually be buying anything bellow 4k. Considering last bear market, the reason it lasted 2 years instead of 1 was MtGox. That exchange had actually around 75% of the trading volume, so after the "hack" event and shutting down we just had a prolonged downturn. So my point is we've seen bear markets that lasted 6-12 months before and one that lasted a little less than 2 years. This time we will probably have good news around September-December. Still you can always buy the major dips happening and take profits. It is not time to hodl.
JamesMayo
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@ipvpirl, hey I understand what you mean. Historically, bear markets last for about a year or two due to MtGox. However, without that trigger event, I just do not understand what is driving the bear market. Right now, I just think its the natural market cycle, which looks like it lasts for about 2-3 months historically (2016 & 2017), with the attitudes shifting to bullish for a couple of months right after. I think the key stop point for me is the 7,800 mark in which the bears really do overtake the bulls in the day candle. At that point, I know that the drop will be significant, so much so that I can still come out with a gain. I always appreciate the feedback. I think regardless of what happens, September to December will be a great time for trading.
qqqpoilove
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My current opinion regarding BTC state:
p.s: although I agree on the fact that the market is more fresh than ever and history doesn't define the future.
JamesMayo
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@Dezz1011, Thank you. I know that past trends help but an obscure isolated trend in 2014 should not be the only thing we use to estimate the next couple of day. All things should be considered together (technical indicators, sentiment, and past trends). There may be a small pullback, but nothing indicates a 50% in the value of BTC. I am still waiting for a good market opening. I hope the increase and pulls can open something up in the next few days.