johnrfraser
Short

Bounce Zones and Low Zones

BITFINEX:BTCUSD   Bitcoin / Dollar
187 9 2
Hi, I wanted to share this idea I've been following for a little while...currently watching to see if it plays out.
Sorry for the messy chart...I needed to scroll back in time far enough to show the earlier demonstration on the same chart.

I've noticed how on big moves, they seem to play out in several phases, which seem to be mapped nicely by the MFI             indicator.

3 Phases:
1 - Bounce Phase
The initial move down drops MFI             into the 'Bounce Level' zone from which it recoils and rallies back up.
This defines an initial low, but does not define THE low. It just provides an initial 'bounce'.

2 - Low Level 1
After price rallyies back up and fails, MFI             drops again, but this time, bouncing off of the 'Low 1' level.
This defines a lower price low than the previous one despite appearing LESS OVERSOLD than the higher low before.
I like this as it demonstrates how reading Oversold and Overbought levels in BTC imo is totally pointless :-)

3 - Low Level 2
After bouncing off of the 'Low 1' zone the rally fails again and this time finds yet another low, this time at an even less oversold MFI             than the previous low.

Looking at the current cycle, we have visited the 'Bounce Level' so far.
I'm seeing a failed rally in price and expecting a visit to the 'Low 1' level for a potentially more defining low than 276.

Measured move suggests a wave up from the 217-220 region.
I see a further potential low around 182/183.

Hope it plays out! :-)


ItisCalvin
2 years ago
I don't know if you actually went to to play out for the sake of the bull trend. We're on a knifes edge as is.

But I'll peek at this chart from time to time.
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MoonTrader ItisCalvin
2 years ago
I think this is a healthy, much needed correction in the market. There really is no bull trend at this moment except at lower levels in the $100s. We're not on the knife's edge yet. It's the end of the beginning for BTC, meaning we need to revert to a more reasonable price and over-correct for the market to make its way up again. I'm not seeing it yet. We're still in panic phase.
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ItisCalvin MoonTrader
2 years ago
Long term bull trend that has been in effect all these years. Yes, the correction down is much needed. We aren't that close to where I'd consider the angle of turning, but it's getting close to it. We are highly overextended right now with all this down movement and hardly any big up moves.
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johnrfraser ItisCalvin
2 years ago
What level do you think ItisCalvin?
My lowest bid currently is 104...as I gather anything under that will bounce high.
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ItisCalvin johnrfraser
2 years ago
If we make it that low, 100s, recovering from that will be slow. I've seen it before where markets go to deep in the shit they just don't make it out. Sure, lots of buyers may want to buy. Consequently, the confidence levels will be dramatically lower. The majority investors likely won't come back in right away.
I think many come under the assumption that by reaching so low we will see an influx of people coming back in. Yet that is generally not the case. There will be heavy support going down. Yet, average Joe investor isn't going to be all in. There is a reason it is called the pessimistic stage, and it's because many investors are worried. Worried we just won't recover, worried about the future. Let's get all the notions of "Bitcoin is great" out of our heads and think like average Joe trader. Joe may only have 5% total portfolio in Bitcoin so it is speculation. When you can think like other traders you can better judge the markets.

I don't think I answered the first question at stake. My levels are little variable being 220s right now.
+1 Reply
MoonTrader ItisCalvin
2 years ago
That's because the market is panicking. It's kind of like a reverse bubble. In 2013 we were overbought on the weekly for 9 weeks straight. The fact that the market is pushing down so hard only solidifies my belief that these prices are too high.
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ItisCalvin MoonTrader
2 years ago
Let me enlighten you in another way. Think back to the bubbles in 2013. If you weren't there for them then it might be hard to remember the sentiment. I was there for Cyprus bubble just watching price creep up. I may have some tweets from back then. https://twitter.com/itisCalvin/status/321109942683717633 Basically during that time it was like we were pushing up so quickly that nothing could stop us. Yet, then we crashed down hard.

uWhat we are in now is the exact opposite. Sure, it is more stretched out, but all downtrend happen in a greater time frame, for the most part, then bubbles. So, because we are pushing down so hard that means the prices are way to lower. People are not making emotionless decisions. They're selling for fear that because we have gone so low we may never recover. The opposite is true for peaks.

Side note, I'm typing this all on mobile so pardon any grammatical mistakes.
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MoonTrader ItisCalvin
2 years ago
Thanks for "enlightening" me, but I was there in 2013. I didn't get involved as much as I should have in retrospect, but I was there. I'm saying the inverted "bubble" is not over yet. This thing needs to crash hard to call it a real crash, and that has not happened yet. It's rather obvious now that the previous two bubbles starting in 2013 were just part of one massive hype. If this thing is going to revert back to the mean, it needs to experience despondency because it's been so high for so long. It needs to over-correct, and we're still above 2013 highs.
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johnrfraser MoonTrader
2 years ago
Hi there, yes I totally agree. I think if we could hit the low 100s it would bring in a big wave of buyers and rejuvenate things :-)
Interestingly, I notice a massive moon here tonight in the UK...any relevance?
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