BTCUSD - BITCOIN - Could it confound the BULLS?

BITSTAMP:BTCUSD   Bitcoin / Dollar
There is lot of excitement as traders compare previous "Bubble" and subsequent price bottoming from which the price plotted bullish path and its apparent resemblance to the recent low at 340. This has given many Bullish traders to start talking about new bullish trend and price projection north of $2000 by August 2014 and yet other $5,000 by Dec             2014 etc

Could, the price continue to meet the bullish expectation or is it going to confound the bulls? What does the correct application of Technical Analysis and Elliot Wave Principle suggest for the Bitcoin's intermediate term price action?

Whilst, my anticipated resistance at 570 zone in my last chart was short lived and now we have 680 at the doorstep. This has acted as a resistance now for few days. It is possible that it might hold, or more likely we have potential small triangle in formation which could be very short term bullish and could achieve 700-720 or on a particularly strong breakout could even reach the proximity of 800.

So in the very short term potential bullish . However on an intermediate term it is in bearish cycle and the current bounce could be viewed as a bear market rally. So my dreaded "RED ARROW" to 300 zone still remains.

Many have taken issues with me for being persistently bearish and not appreciating all the positive fundamentals filtering out recently. Many ask me at what time will I change my mind? Why should I expect 300 retest for the final low?

It would seem that my attempts in explaining these in the Chat has been unsuccessful and perhaps confusing in usage of various terminologies of Bull and Bear cycle or moves.

Well, whilst I do not expect you to accept my analysis without questioning, at least fully understanding my reasoning and apparently taking a solitary stand on the matter could assist you to considering possibilities and then dismissing it if it is flawed and you have a better handle.

Here is the Youtube Link http://www.youtube.com/watch?v=OzZ0t9BVLPA
Variation of theme
Not gonna happen, man. How long you have been involved in BTC?
-3 Reply
DanV MOD AKWAnalytics
Thanks for your comment. Tell you the truth. I only hear about Bitcoin around Dec 2012 and did't really start to chart till around Aug 2013. S I guess it is not as much as your experience in Bitcoin's history.

I understand that there are particular personalities of for any market or instrument and Bitcoin is no exception. So I sincerely wish you could be proved correct and that I would accept I got it wrong which I am prepared to do. No Problem with that.

However, where price action and wave cycles are concerned it has a way of proving best of analysis wrong if you just follow the crowd or general sentiments no matter what it underpinning such views.

So we will have to wait and if necessary I will bow to your superior knowledge. I can wait.
+7 Reply
ioxoi AKWAnalytics
I have a little more time with BTC that Dan, but I think this is a very different market that Dec 2013, or Mar 2013 or Dec 2012 ...

Now the market reference is houbi not Gox, the reference currency is CNY not USD, the 70% of the market are Chinese traders ...
and probably the old market in which you have a lot off experience is a market manipulated by GOX.

but the BTC market now are a not regulated $7.200 Million not a $110 Million market, now we are working with new rules the traders are a professional traders, not a evangelist of electronic freedom
Interesting comment. From Currency point of view the Yuan has been weak Vs USD since Jan and could appear that Houbi is strong but only because of Yuan weakness, not necessarily due to Bitcoin's strength. Thanks for sharing.
I have to oppose here, I guess you took this figure from overall volume comparison, but how can you compare 0% fee exchange volume with 0.2-0.5% fee exchange volume? If you have your own sources of the actual money flow then please feel free to share them. But otherwise I believe it is way harder to actually say how much influence china has now.
DanV MOD Fahrenheit
You are entitled to have your opinion and disagree with my view. Nothing wrong in that. However, I am not sure what volume you are referring to. I have not taken into account anything about the volumes or exchanges etc. I was merely explain that Yuan Vs USD ie YuanUSD currency pair has been weak since Jan 2014. That actor helps to understand why BTCYuan would be more bullish than BTCUSD. Hope this help to clarify my point.
ioxoi Fahrenheit
My sources or data are http://data.bitcoinity.org/markets/volume/30d?c=e&t=a&volume_unit=btc

and you can check the market share of okcoin, huobi, btcchina y anxbtc

last 6 month: 60%
last 30 days: 76%
last 7 days: 79%
last 3 days: 84%
last 24h: 85%

With this data The market share is clearly growing in China (with the same fees)

are you sure that you look any data?
Hi, Not sure if that question is for me or other participants. I personally do not look at these data as I am not about which exchange or country is more or less dominant in the market. This type of analysis could help in consideration of what might happen if something were to happen in that exchange or country. But not that directly applicable to chart analysis unless we are at pivotal point and some major even is anticipated in that exchange or area. However, having just checked it quickly from your link, to me it seem the volume has topped with Jan high and since regardless of which exchange, they seems to be on the decline. May be another spike in volume with major low at some point could be more indicative of significant low being established. Hope this helps or at least indicate how I would use data like that. But really not the main part of my analysis.
ioxoi DanV
is for UseLitecoin.
Equand ioxoi
Nobody is looking at huobi anymore, it's Bistamp or Bitfinex now.
-1 Reply
Thanks for your comment. Not sure if you mean that we should look at Huobi or that it is no longer important?
It's not that important, everyone knows China is a skeleton in the closet now and no longer an elephant in the room. They can close the exchanges tomorrow there, it will impact the price to $390 or $430 but will quickly rebind like with Silk Road news.

The current pit-stop is related to Ghash.io taking 24h percentage of pow.
+1 Reply
Justice AKWAnalytics
It happened...Hopefully you were not long.
Hehehe, you bears never give up XD
You really think with paypal news, 1w MACD crossover, dish btc acceptance, and other ultra bullish news, we'll retest 300?
It's really much more likely that things will go exactly as they did before. History tends to repeat itself.
And please remember that bitcoin is not your regular stock, but there is such a thing as "adoption", which goes with Metcalfe's law.

Of course, you can never rule out an event, but rather one can speak of probabilities. I'd put your scenario in the <0.1% propapility range. I say it's more likely that we hit 5000$ in late August, nay, even 10,000$ this year, than to hit 300$. Mark my words.
+1 Reply
Chevdor FlaviusTodorius67
DanV is patient.

I remember a discussion in a hang out from DanV where we were debating over what could make BTC sink as DanV was expecting.
He had no answer to that but stuck with his idea, not trying to convince anyone.

Some crazy people said that Gox could close.... and we all laugh very hard about such silly idea....
+3 Reply
Huh? People were predicting the fall of Gox for months prior to the shutdown, myself included.

Patience will be a detriment in this case. The new cycle has already begun. It is hard for n00bs to understand this.
-3 Reply
ChimbOt PRO AKWAnalytics
Bigger issue in china could easily cause this
MoonTrader ChimbOt
Oh, please. BTC is so over China.
-5 Reply
DanV MOD AKWAnalytics
If the new cycle has already began, then you will be very pleased to be proved right. May be you do have more detailed knowledge about the Bitcoin.

Lets see how it unfolds. Thanks for your comments.
+4 Reply
Don_Bossa AKWAnalytics
The n00bs are thinking this is a 'new cycle' just because we've had a little up recently.

The main reason for the recent up, I believe, is that the Mt Gox, China Fud, hacks have been forgotten about. New investment and confidence has begun to shoot through which has caused the recent short to intermediate term trend reversal.

To break this 'new cycle' here are a few potentials:
Outright ban in a country 10%
Hacked exchange 5%
Corruption 25%
Major investment switch into a new coin 25%

The maths behind that risk proportion could be better but I'm sure you'll agree there is still high risk that could break down the price further or completely.
+1 Reply
DanV MOD Don_Bossa
I would tend to agree with you, At least that the bounce of 340 is a bear market rally and not a new bullish cycle.
Thanks mate. I appreciate that.
DanV MOD FlaviusTodorius67
I see you have a particular logic behind your view. In the final out come you could well be absolutely right and this beast might not even stop your targets. That would be the best outcome even if I would be embarrassed and admit being wrong.

Hope you know about the market leading up to 200 Top and Dot.com bubble. I can assure you there was no shortage of views and opinion that this time its different. Even Alan Greenspan called this new phenomenon as very welcomed and did not see Nasdaq collapsing any time soon. He made that statement the top was being formed. Rest is history.

Even Bitcoin experts and trader were chanting the same sentiments when the price was at 1000+ and rubbished my views of it falling to 600 minimum and 400 most likely. You will know that happens well before the MTGox event. So one cannot even say it was coincidental. Though I again I posted chart soon after Jan 2014 High and said retest of 400 is in prospect and possible even lower. Well you will know what happened.

So for you my friend I sincerely hope you are right. But don't dismiss the real possibility of lower prices before reaching your targets.

As far as 0.1% chance for hitting 300, I guess we will have to wait and see how it resolves. It is the odds I am happy to play and look forward to comparing notes here by August or even Dec 2014. Thanks for your comments.
+3 Reply
dude it isnt likely. the weekly channel has been unbroken for a very long time
DanV MOD waryflight
Fine, then let us fly. But keep my comments above in mind just in case we are caught in an embarrassing situation.
+1 Reply
tech beats fundamental, I'm a believer! expecting a drop on sunday.
-5 Reply
Hey DanV,

Do you think we'll make it to the $700 - $750 range? I've noticed that volume is starting to dry up and the bulls seem to be losing steam.

Right now 680 is still a major resistance but if it holds at the current level then there is real possibility or 700-720 or even higher if the breakout is strong. But then I am expecting price reverting to the downside. Sorry could not be more specific.
No problem! Thanks for all your hard work.
+1 Reply
Drying out of volume in this congestion is expected after strong rally and that could be bullish in that not much volume in selling and follow through to the downside. Besides we have potential triangle. that suggest we will have a break most likely to the upside with 700 - 720 zone.
bearish gartley =D
DanV MOD bnzn_qwazar
I don't specifically focus on those harmonic, but thank you for pointing that out. Excellent.
+1 Reply
trendline just broke.... personally I thought it would hang on until sunday. perhaps it'll track up the trendline and then react a bit more
I think you try to manipulate the other people of selling now with the knowledge that your prediction is false.
DanV MOD Corelianer
You can believe whatever you wish. I cannot tell you or any others nor attempt to manipulate any. Each have their own metal capacity including yourself to make your own decision based on your own analysis. I am only sharing my chart. Might prove right or completely wrong. Would be nice for you to stick your neck out and let it be on record what your analysis is suggesting and then be accountable right or wrong. Otherwise opinions are penny a dozen. Thanks for your comments.
+1 Reply
I see no reason to label this advance as w and y. It looks very impulsive
Good luck!
+1 Reply
DanV MOD traderWgun
I would not necessarily agree with you. But thank you for sharing.
Even with China banning news being lighted up once again, it will never cause such a dump.
Look at the January-April crash and you'll know it.

For such an event to happen, Bitcoin system needs to be compromised by hackers.
DanV MOD LastBattle
If there is a need for catalyst it might come in some form or some development would be capitalised by larger well resources player with some knowledge of trading. So cannot tell you what might come but if necessary it might well happen.
I guess that would be some problems with possible 51% attack. Right now the GHash.IO mining company has nearle 50% mining share, it's dangerous. The same thing happened at $995 peak on January 7
+1 Reply
DanV MOD ShortThePlanet
It is an area in which I have no knowledge nor aptitude to understand the implication. My knowledge on technology it near zero. But I can see how something could quickly gather storm and be the catalyst for price action if that is what is needed or could happen to coincide with the cycle. Excellent. Thank for sharing.
ioxoi LastBattle
LastBattle, now we have other risk, the Gox manipulation is ignored, but are you sure the bitcoin value is real?.
How many bitcoins buy the mark karpeles boots?
Where are this bitcoins?, are a stolen bitcoins?, are in a mark karpeles brain wallet?, they are a lot off hands, or only a few hands buying bitcoins in china?, really is not posible than tomorrow something sell 1 Million of bitcoins?
they are a lot of risk in the bitcoin and a lot of different interest.
I absolutely agree. And that element is going to be unknown and possibly unbeknown in advance for most analyst like me and possibly you too. So we can only work with what is readily available to most and how folks could use that to help or clarify their analysis. But hope fully possible price action and pattern could at least put us on right side.
Have you seen the bubble watch? http://imgur.com/a/a5XYz
Or this chart comparison? http://i.imgur.com/khsBncr.png
DanV MOD IAmSatoshi
Yes I have 1st one cannot tell you specifically due to possible confusion, with the 2nd one I think is it great effort by the analyst. However, some degree of interpretation and discretion is involved. My observation is that whilst there is similarities, the actual moves or amplitudes do not have to be similar as they are part of different cycle and so have different degree of measures. Hence I would say misapplied in the way they are shown to represent expected moves. I know this is difficult area of analysis ans appreciation so will understand if you or the analysts concern disagree with me.
Appreciate your analysis, even if I doubt your conclusions. It's good to have a competent genuinely bearish perspective when everyone else turned bull.
+1 Reply
Thank you for your comments.
Hi Dan. Thanks for providing top quality EW analysis for us on TV. Appreciate your perspective and talent. How do you see this 4hr macd divergence playing out? Consolidation, weakness or irrelevant as bitcoin is made of cheese from the muhn?
I think it is where you have drawn your line from on MACD. Based on my chart I think it could find support and move to provide divergence in HH in price but LH in MACD move we resolve out of this triangle to the upside with possible 700-720 target.
Thanks, makes sense ...
I am new to trading and have found watching you defend your position very instructive. I would like to thank you, and those who provide your counterpoint, for being so generous with your time and expertise.
+1 Reply
You are welcomed and thank you for your appreciation.
if we are right that TA represents the psychological behaviour of the market participants (of course besides many other factors) then we have a Problem.

End of 2013 and till end of Q2 2014 was the "Wild-West" of bitcoin.

Countless external issues (China in, China out repeatedly, Gox death, Other exchanges hacked, thefts and so on) influenced the behaviour of the market participants.

Since about April 2014 the BTC-Ecosystem/Environment has changed drastical.

The above mentioned issues are not relevant anymore.

TA timely based on 2013 up to now should be revised..

This beeing said don`t you think it would be more appropiate to start EW-Analyses in April or may 2014? I am sure this analysis would be quite different from the old one.
Hi, thanks for your comments and question.

I appreciate that the circumstance might have changed as per your notes. However, what has taken place and events that have left a psychological impact in the sentiments of the participants is hardly going to be switched off just because the more favourable environment might be developing. The effect of these could continue to impact on trades longer than you and I might care to consider reasonable.

So, these will also affect the way they engage and the risk they consider taking. That is part and parcel of price evolution and interwoven with new developments taking place.

It can be reasoned that the major equity market has gone through major changes too, wars, depressions natural catastrophes and weather patterns and financial shocks over hundred of years, yet the TA continue to work in general. So I see no need to ignore all price data of Bitcoin and commence from April 2014 low.

Even if we were to do so form EW perspective the move up from 340 is of corrective nature. Hence a retracement of some kind to the upside, which will complete and retest the last low is natural expectation. Though I might add if the price progression since 340 low is genuinely a new impulsive move to the upside, it is hardly going to stop just because I think it will not continue higher till retesting the 340 zone or even make new low.
Hope this clarifies and addresses your question.
+1 Reply
Hi DanV,
thanks for clarifying and addressing from your Point of view..
I am not totally and completely convinced thought.
What about a EW-Analysis from april2014 beginning just for the sake of curiosity if someting would be changing?
This would be educational too to underline your arguments.
Asterix segeln
But there would be only 1 or 2 months of data starting from April 2014 - how do you propose to do it?
segeln Asterix
I am not savvy about EW-Analysis. Can`t it start with data from beginning March/April 2014?
Any other TA could do it
Assume you ignore all data prior to April low at 340. In that case whilst you might have other forms of TA say we have higher high and now look for higher low. That would confirm an up trend, May be your moving Averages trendlines etc would suggest, but not prove that we are in up trend. So next question is is this up trend likely to continue or fail. You could wait and see what happens. If you wish to trade to the upside you can manage you position with stop loss in case you are wrong.

That is acceptable. However if you do have another retracement you would class that as retracement and not possibly a trend reversal. So far so good.

Next you get another leg to the upside but suppose this one hit a wall around 720 or 800 or similar, you would be extremely bullish leading into it, but be knocked for six if we get trend reversal. You might even manage to get most of the position exited for good profit. The what? you will be so bullish that you will keep looking for long entries, and be constantly be exiting at BE or loss. When do you know it iwll put a bottom in and revert to up trend?

So all you can do to some extent is just trade by reacting. Then you don't need to carry out any long term analysis. Then it does not matter if you have long term up trend or down trend.

However, if you are looking to buy and hold, and are convinced that you are in uptrend then you would just buy and forget. So does it matter if the BTC oscillate because in the long term it will go up.

So does it matter what you see on the price chart? You could then keep stating your point of analysis wherever you feel supports you view.

I would say TA may not be for you in that case.
It s all about impulsive nature of a little up, many gone bullish. And now people begin to see, what they are willing to see. But Dan is right about his warning for new lower low
Hi Dan. I am one to cautiously agree with your warnings. I am surprised to see my 'Bump & Run' forecast from 2 months ago following along nicely so far. It seems to support your theory that this has just been a corrective wave in the bearish cycle.

BTC (Weekly) - bump and run theory

When the low of $340 hit, I realigned the fib retracement. This gave a 50% target of $751.40 which we have failed to hit. My question is whether we still need to move to this target or will the 61.8% target of $654.26 (hit) be adequate and marks the move back to the bear cave? From this, the 127.2% target is $115.88. I don't know if I can fathom BTC going that low, but who knows. Maybe this talk of an FBI bitcoin dump might just bring us there.....?
+1 Reply
DanV MOD DanLaffas
As part of the Running Flat we are in progress of wave "c" of B. Hence this is anticipated to be possible rising wedge. As such we are looking for retracement to 520 zone before final leg up which could take it to 750 zone +/- some margin for entire completion of the Wave B as rally in bear Phase. The we will come in wave "C" leg down and it is that which could upset the BULL and is likely to be relentless 5 wave decline which could at least retest 340 low or make new lower low for Entire correction from Nov ATH. Thanks for your comment. I appreciate it.
Are you doing an update/discussion this weekend?
Hi, Updated discussion on what? Not sure what exactly you wish me to cover and if there is going to be enough interest in wider community. So not sure for now.
Hi Dan, you posted two possibilities; So now that we have tested 520, barring another short term test at say $530 or $540 because china is still hasn't properly broken throught the daily average and tested these support lines, do you still think there is a high probability of the upward move towards $700 vs moving down to $300 to $200 from here?
Hi, Thanks for your question. For now I am leaning towards a retest of 520 low on Finex, Btc-e may be 540-530 and similar for Stamp. Then head 750 zone towards, Before reverting to 340 of lower. Hers is outline road map of what I mean - https://www.tradingview.com/e/IxCB60nb/
+1 Reply
Thankyou for clarifying
Just come by and say thank you to you. I watched a couple of your videos on youtube and learnt to how to count Elliot wave more accurately. You videos are great! (a little bit long though...). Here is a chart on kiwi I published just now, applying what I have learnt from you:P

Toutatis_4179 Toutatis_4179
EW analysis suggests more upside on kiwi
DanV MOD Toutatis_4179
Thank you for your comments. I agree they are little long. But trying to address many of the concerns others have expressed to e and clarifying the reason live do takes some time. Will keep it in mind for next time. Interesting EW counts on AUDUSD. Agree with most of it. Though just would add that we might not have full larger 5 waves but rather abc.
Thanks for reminding me about the abc pattern. I am actually waiting for the top reversal signal to short. Obviously the upside looks pretty limited. I was just surprised the price was following EW wave so well so far.
DanV MOD Toutatis_4179
Yeh, some times not easily interpreted, but they do follow EW counts in any instruments.
abit of a run up to $600 do you still this we will restest low 500s?
KleinDe KleinDe
mean to say
abit of a run up to $600 do you still think we will restest low 500s?
Encore DanV, From your old friend Charlie!! we will see in the next couple days about the next level. Cheers
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