If you have been following me you should be 60 to 65% into BTC or Alts depending on your preference. Keep in mind that BTC will not keep going down forever, at one point it will stage a rally to the 200MA, we just have to find out from where and when? We know that we've had too many red candles in a row, which means that some green candles are coming for sure, so we now have to find the "where" meaning what juncture can generate a rally to the 200MA. I have found -- as you can see on the chart above -- an area of interest from where BTC can spring up to the 200MA. All of these lines meet around December the 6th. So the potential rally can happen anytime from December 1st to the 15th. To be clear this means that we will spring up to around $9400, get rejected and fall back down. It is unlikely that we will continue up from this point. This is just part of life under a death cross, we still have to go through a boring period of consolidation before we get out of this mess as well.
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To add to this, check out this chart that shows that the same will happen around also the same time with the total market cap around December 15th.
The takeaway The time to make long term purchases for Alts is now, but do not commit 100% of your capital, wait for the rally to the 200MA. A rally can happen between now and mid-December. This is not guaranteed but the probabilities are very high and that's why we have to be on the lookout.
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NOW, THE LEGEND; Support trendlines are green Resistance trendlines are Red Horizontal support lines are white, the thicker the stronger the support 50 Moving Average is yellow 200 Moving Average is white
THE TREND: Going Down THE OUTLOOK: Begining to see the end of the downtrend a rally may be coming soon.
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I should clarify that even if we make a rally to the 200MA that does not rule out going back down and possibly to the mother of all buy zones. Which due to the weekend meltdown is now in play.
The support lines are easy to see and they make more sense if you go back and use the monthly view.
The trendline: Correct BTC keeps breaking support so you have to keep looking for previous trendlines where BTC has touched multiple times, and the likelihood of it touching again is there, hence me using the one you mention and it seems like it has considered it as support for now, also look for MAs to reinforce the trendlines from time to time.
Profit: Yes but this is reserved for the 2 coins on my midterm portfolio -- which is more risky that my main long term portfolio. Not touching coins on the longterm portfolio at all.
sasquatron
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@cryptoGats, Out of curiosity, what are the 2 higher risk coins in your midterm portfolio?
Appreciating your charts.
@cryptoGats, ref the other question I had - "you base your trend line of what happens in Jan to March, but if you look further back that trend line goes back to 2017 - so my second question is what determines when you start and end a trend line and at what point do you ignore historical data like that?"
...also out of curiosity, how do you break your portfolio down - what %age is midterm, and what %age is long term? Thanks again!!
cryptoGats
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@investicli, I think you mean support line, so I'll show you in the example below. Also, keep in mind there are support and trendlines they are both different. The support lines are easier to see in the 1-month view. So you go back to the 1M view and see if there is a specific place where BTC has stopped over and over, you are trying to find a place of significance in this exercise. I've put black arrows on the places where BTC has hit that line. Over the last 2 years, BTC has hit that line of support/resistance 8 times (a combo of wicks and candles can be used), therefore it must mean something, it seems like an important place. As you can see I was right it stopped on it this time. As far as the portfolio I just do midterm coins when it jumps at me that an easy opportunity is ahead, essentially out of sheer convenience. However there is a formula as to which coins, but that's a long topic.
investicli
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@cryptoGats, that's also very interesting, but actually I meant your green trend line, the sloping line. I note that your trend line is based on "what happens in Jan to March" but if you look further back that trend line goes back to 2017 - so what I am asking is what determines when you start (in your case, this year) your trendline what point do you ignore historical data like that from 2017?" In other words, if you included 2017's data in your green trend line, the angle would be quite different. So how far do you go back?
cryptoGats
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@investicli, Let me see if I understand correctly. That trendline was drawn parallel to the 50MA on the 1W timeframe. Typically you draw a trendline because BTC seems to be following a certain path but the date is irrespective. As a rule as long as BTC has hit the trendline more than twice it is a reliable one, in this case from Jan to April BTC ran along that line and hit it 10 times so it becomes relevant, however, there is a more important line that runs from jan of 2017 and it seems like BTC does not like to go under that line, that line gets the title of primary trendline. Did I clarify?
Satei
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@cryptoGats, „However there is a formula as to which coins, but that's a long topic.” - you know how to increase curiosity :) Hope you will share something more about it one day soon ...
cryptoGats
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@Satei, Absolutely, it's just that stuff like that gets lost unless we dedicate an entire post to it.
The trendline: Correct BTC keeps breaking support so you have to keep looking for previous trendlines where BTC has touched multiple times, and the likelihood of it touching again is there, hence me using the one you mention and it seems like it has considered it as support for now, also look for MAs to reinforce the trendlines from time to time.
Profit: Yes but this is reserved for the 2 coins on my midterm portfolio -- which is more risky that my main long term portfolio. Not touching coins on the longterm portfolio at all.