ronfkingswanson
Short

November bubble has yet to finish correction, trend unchanged

BITSTAMP:BTCUSD   Bitcoin / Dollar
2042 14 21
Many analysts have taken to calling the most recent selloff to 340 the final "bottom" of the November bubble correction, as it did touch a strong long-term trendline that is presumed to be supporting the price into the future. Even now, price action has flattened to epic levels of boredom as we approach the intersection of that trendline (dotted brown, above) with the descending January bear triangle top. Clearly there is a great deal of expectation that we've "finished" this November bubble correction, and the current sideways (instead of more sliding) is a sign that the trend has shifted. These same expectations are projecting that we breach that bear triangle very soon, and start a new bubble rally shortly thereafter.

However, a study of the general bias of the price action after each of the major bounce rallies since January shows a clear downward angle, and if we are to assume the last bounce (from $340) is the last one, we should be seeing a marked shift in the trend bias, maybe as was seen in the period following the April 2013 bubble correction, when a final selloff resulted in a bounce -- and then a new gradual but clear trend bias that pointed the way to the November bubble. But that is not what is visible in the daily candles or in the RSI trends. Thus I find it hard to view this last selloff as the "final bubble bottom", but am expecting further decline.

Another factor that might be at work here is the orange zone, which represents a gap in the price -- where we only crossed that zone during the steep November rally and have yet to retrace that price range from $340 all the way down to the April bubble high of $260. Such a retesting of the previous ATH             would be a very strong conclusion to the November bubble and could very well support a strong exit rally.

Whatever drop might yet come, until we see a clear shift in the average price action trend angle (as happened in July 2013), it will be difficult to conclude that we have left this 6-month long bear market trend.
nick.stoneman.5
2 years ago
You've been right up to now Ron, and this latest analysis seems to make sense. Brother John F on the Bitcoin Channel had a chart some months back showing how, for several years, after each major ATH peak the bitcoin price drops back to the previous peak before climbing to new highs - your $266 fits with that. Be interesting to see how this plays out. Many thanks as always for you insights. Best wishes, Nick
+1 Reply
AKWAnalytics PRO nick.stoneman.5
2 years ago
Not true for the April '13 bubble. The breakout from the 2011 bubble occurred around 30 $ in Feb/March '13 and never got back. The Gox low was 50.01 $, a full 66.66% higher than the previous bubble high. 433 $ is that 66.66% level over the 260 $ April bubble high. Just saying
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ronfkingswanson PRO AKWAnalytics
2 years ago
agreed that not every ATH has been retouched. Chart simply shows how and where such a retracement could be a part of a final corrective dip.
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flibbr nick.stoneman.5
2 years ago
Price never drops back to previous ATH.. infact always drops back to approx 2x previous ATH.
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Should have rolled off by now and the RSI on the daily never followed through. Not there yet, but watch that 50 level. This could get interesting fast...
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Corelianer
2 years ago
You always ignore the price for mining hardware, so I don't agree to your conclusion. Bitcoin cannot just be analyzed by chart-analysis.
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ronfkingswanson PRO Corelianer
2 years ago
I don't believe a single trader on these exchanges is considering the going price for mining hardware, so no, you won't likely agree. I've been a miner, too, for at least year, and I've never seen any evidence of a connection between the speculative market price action on the exchanges and the pricing of mining hardware.
+1 Reply
pumapunko PRO ronfkingswanson
2 years ago
Hi Ron

What do you make of the 5 green MACD bars on the 3d Chart for bitstamp? Its the first time thats happened since december! Surely thats an incredibly positive, bullish sign?!
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ronfkingswanson PRO pumapunko
2 years ago
it's a good sign, sure, but 3day MACD is so slow and laggy that plenty of drama can still happen without disturbing those bars in the long run
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pumapunko PRO ronfkingswanson
2 years ago
Drama and china fud has all been priced in already. In the past few weeks, news of further Chinese exchange closures have done little to the price. There was also a nice move up to 465 today which bucked the boring sideways action we've been having for a while. Theres good news fundamentally such as the winky twins stating that BTC will be bigger than Facebook and the FED stating that it will be a boon for global commerce.

It really looks like anything south of $400 will be unlikely. A slow climb up to 700 followed by a small retracement and then a push to a new ATH seems more plausible.
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ronfkingswanson PRO pumapunko
2 years ago
agree there's plenty of moderately good news around. I don't at all agree, however, that China is completely behind us. Nothing has been resolved over there. Absence of news is not evidence of the PBOC drama being over. http://bitcoinblog.de/2014/05/12/bitcoin-is-not-a-naughty-child/
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jago25_98 ronfkingswanson
2 years ago
On the technical does this 460 count as anything? False breakout? Turtle? Nothing?
I'm short with a stop above the cloud and TP 360. Maintaining this.
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ronfkingswanson PRO jago25_98
2 years ago
too soon to tell. clearly on sideways alone we're breaking the bear triangle boundary, but the daily ichi cloud shows we've got plenty more sideways before this can turn into a moon rally. And China still looms unresolved...
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pumapunko PRO ronfkingswanson
2 years ago
I do wonder sometimes where the price would be if China hadn't been so hostile to crypto...
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