This Bitcoin chart is all about perspective.
The chart on the right is using the linear price scale, to which most of us default in our daily trading. The chart on the left is using the log, short for logarithmic, scale. For those who might be unfamiliar with the log scale, here is the definition from Investopedia: A type of scale used on a chart that is plotted in such a way that two equivalent percent changes are represented by the same vertical distance on the scale, regardless of what the price of the asset is when the change occurs.
Some of us might be saddened or pessimistic about Bitcoin / the cryptocurrency market right now. This is very understandable, especially if we look at the lineair price scale. Bitcoin went down to $5,800 in February, coming from nearly $20,000 in December. Right now, shorter term, the market is and Bitcoin's is dominating trends of alt coins. However if we zoom out and look at the bigger picture it seems less wrecked as it might appear.
In November / December 2017, Bitcoin rocketed to the moon, hype and fomo fueled rocket engines make it break orbit from the yellow channel on the log scale chart, but... it couldn't escape its gravity and when the hype fuel burned up it got pulled right back in to the channel. We could and should probably call it a crash, also considering how it influenced the market as a whole, but it still acts within the yellow , while it could also have crashed through that bottom by now if the market would have crashed beyond repair or hope for salvation.
This chart is for reflection purposes, I hope it might help those of you in need for fresh perspective. I will soon post an updated zoomed in BTC chart with my short term price expectations.
Personally I only enter trades after I witness a break confirmation. My analysis is not financial advice: you should never invest solely upon reading my or another persons TA and do your own research: explore news, social media, tech info and so on. Monitor your investment and set alerts and stop loss orders in place.
If you like my charts an upvote/like is much appreciated.
Happy Trading! ~ CryptoJC
Here comes few questions from me:
1. Do you think thay we might get "Dejavu" from 25 march last year?
2. It looks like we need to hit final resistance in order to go up again do you think that reversal pattern might happen after march?
3. Do you think that it is worth to play short or just wait for a clear picture when we will break out from 10.000$?
Cheers from Sweden! Keep up the good work!
1. Not completely sure, but we might. Although not exactly the same, the beginning of 2017 shares some similarities with the beginning of 2018. Both came down in January from a December high, both years had fud news in the first months about (China/SEC) regulations. A lot of traders in early 2017 must have felt the same as a lot of us do right now. TA wise I see no reason why Bitcoin shouldn't blossom after the initial dip as it did in 2017, but we shouldn't compare appels with oranges either: the end of 2017 attracted massive amounts of "main stream" investors unlike any years before it. Many non tech savy people jumped aboard the hype train but jumped of it just as quickly once BTC started to crash. For Bitcoin and cryptocurrency to blossom it will need to appeal again to those main stream investors again. Also the amount of manipulation, bot trading, scam and pump & dump has increased to an almost comically high level, which isn't all that appalling to the regular main stream investor. We'll have to see how the market is going to deal with all this.
2. For me to regain more durable confidence about Bitcoin again I will need to see it surpass 11.8k, and preferably 13k to declare it really bullish again.
3. If you feel confident about your day/swing trading skills and you have the time and nerves to monitor Bitcoin closely, sure go ahead. But truth be told, I can hold myself quite alright with my TA / line drawing, but I suck at day trading a volatile BTC; the swings are at times very erratic and often demand split second decision making. Especially when trading with leverage you need to bring your A game or better just sit on your hands till you have a better picture of what is coming.
Cheers from the Netherlands!