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BTC WEEKLY CHART: "The Panic Zone" Weekly trend line breakdown

BITFINEX:BTCUSD   Bitcoin / Dollar
There is nothing but weakness indicated on all charts. This breakdown occurred on the daily chart a couple of weeks ago and has now affected the weekly chart. I don't provide free commentary about the daily chart activity.

There is some support at $430 but for the most part a retrace to the $338 line is highly probable. The reason is purely technical. This market has had a sustained rally for almost a year and it is time for a consolidation.

I would be surprised to see a breakdown into the "Panic Zone" which is below $275.

I fully expected to reach the blue dash line before the beginning of a correction. We almost made it. A new rally will not begin until the blue dash line is crossed. This will be in the 2 to 3 month time frame. For now, I'm waiting for cheaper coin to buy back in..

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I swear to god that the market waits until I say something and then does the exact opposite in a big way. It's only purpose is to make me look like an idiot. That said, this huge 20% surge in three day rally is an anomaly. While the volume is large it does not match the size of the price move. I suspect that a single investor or a very small group of investors have made a decision that has moved this market in a very big way. It smells like a black swan event based on a fundamental factor that is not predictable using technical measuring tools. This could be a precursor to a big fiat currency devaluation that is about to take place. China?
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China is 100% fueling this hot rally. The upward pressure in the last 4 days has been enormous indicating a pending event that only insiders in China are aware of hence the sharp move with volume indicating a the involvement of a handful of investors. Here is an article covering the subject: http://techcrunch.com/2016/05/30/bitcoin-price-jumps-21-percent-over-4-days-reaching-a-21-month-high/

I reiterate that these black swan events occur without technical trading indicators and always manifest as a surprise. This one happens to be pleasant.
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joshr799 PRO investigator
6 months ago
Its not a black swan event, it's public knowledge that July will be when the block reward for mining is reduced by half the amount of bitcoins currently awarded to miners. Thus affecting the supply of newly minted coins.
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investigator PRO joshr799
6 months ago
Thank you for that comment. I did not know about the change in reward and I have seen a miner or two declare bankruptcy. It is a contributing factor but does not completely account for the timing of the move. The total BTC availability curve based on mining effectiveness was nearing the top a while ago and the market has gyrated up and down. However, there is compelling evidence that this straight up 25% surge in price has more to do with a small group of investors in China then anything else. There is very little correlation between the percentage volume increase and this huge price move. The technical reason for the move is that the market is currently thinly traded. I suspect that there is going to be a major Yuan devaluation coming. Like all rallies, this one will come to an end. I suspect that it will be as dramatic as the rise. I have no technical tools that can predict the outcome timing. Observe the BTCCNY chart relative to the BTCUSD chart and it becomes apparent that CNY leads the market. My suggestion is to pay close attention to the BTCCNY charts.
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