XBTEUR: To the gamblers, latecomers, and bubble chasers

I think it's a good time to reevaluate divesting from crypto once again. We have considerable risks, yet no one even bothers thinking about them. Anyone aware of fundamentals knows that we can see some nasty scenarios in the coming weeks and months. I would reccomend taking a break from crypto, and for instance, holding only 25% of your capital in it, be it in the shape of some cryptocurrency or cash at exchanges. The former induces risk from potential volatility to come, the latter, from 3rd party risks. Either way, it is a risky proposition, so however you look at it, try to use reason, and not emotions to decide how to protect your wealth. Upside vs downside risk favors being in cash, or even short. Fundamental risks, and sentiment extreme in BTC , and the broad crypto markets make me think the technical setup is likely to materialize, and that we can get a correction any time soon. Perhaps after June 16th, since that is the earlierst known date where we might encounter 'scaling risks'. After August 1st, some risky scenarios might ensue, some of which could cause difficulties to exchange operators, and all of which can cause this market's value to decrease significantly.

The technical chart called for a rally to 3000 euros, by the end of Dec 2017, or sooner. In this case, I could assume that we have two main scenarios going forward:
  • #1: The time duration of the rally is valid, and we get continued upside. This doesn't imply a correction won't happen. The market can take many detours before finally topping by year end. Sentiment and shorter term signals would be our guide, to navigate trends while risk/reward is positive in the short term and sentiment still negative or neutral. Sentiment is extremely bullish now, which is a contrarian signal and a cause for concern for any astute investor. In this positive scenario, we get a healthy correction during this time and going into August events, and maybe lasting for a while longer until sentiment resets, everyone panics and we bottom in the weeky timeframe again. Then we launch into a rally for the duration of the year again.
  • #2: This was IT, the crypto bubble peaked, we get a nasty 2 year+ correction or consolidation akin to 2013 to 2015. If this is the case, which I fear might be, we might never hit the 3000 euro mark or we hit now before the time expires for the long term rally. This could easily form a top any time soon, and the fundamental events to come would exacerbate the selloff causing the newcomers to lose all their money, longs to get margin called, maybe some exchanges to go bust, and then get a continuous chain of negative events, and increasingly negative sentiment...some possible events include problems after the scaling solutions are implemented in BTC , ETH facing technical design problems that cause the rally in it to peak and massively decline back to monthly support at 11 eur after PoS gets delayed again, China to regulate ICOs, maybe harsher regulations take place broadly accross crypto markets globally, etc.

People should be wiser investors, and not gamblers who chase momentum. This never ends well, or at least is not a wise investment strategy. The insanity in sentiment has made people very critical of my work, I get ridiculed, insulted, mocked often. When all is said and done, I might be proven right, to the permabulls dismay.

Disclaimer: I think BTC and cryptocurrencies are of tremendous utility in the world, and a new asset class in their own right. I would like to maintain 25% exposure to this market at all times, but it's wise to diversify into 3 other asset classes to store and grow your wealth. (local and foreign stocks, bonds/gold/silver, cash, real world businesses/passive income sources). Specially after a huge win in one market, pour the gains into equalizing your exposure in other fields.

I think BTC topped here.
Comment: Correction started...
Trade closed manually: I'll wait, banked 1% gain with the last entry. The action during the next two months might be choppy, unpredictable sideways, no trend.
I'll wait until all scaling news are out. In cash and trading other markets. I trade trends, not chop.
Comment: The move down was correctly forecasted and we did alright. Minot drawdown compared to the but and hold crowd. My goal is to outperform the benchmark, so far, so good.
Comment: We went long at 2050 eur after bottoming in the short term.
Sentiment information was good, I went long at 2050 after bottoming against the OkCoin key level.

I had many people complaining of NOT being in the short then...before they were all complaining of not being long. -this was at the previous top- Sentiment is the best timing tool paired with technical information. If you have a fundamental understanding of the instrument, you will do well.

My take is that this is a sideways consolidation range until August 1st, then we probably rally again for the rest of the year.
Comment: The risk is a drop below 1224 now, see my last publication for my updated view on this.
So I guess your prediction might not be right, we are still going to 3000$ !
IvanLabrie elesdyzer
@elesdyzer, saw my updated posts, follow up, and analysis? Read all updates...Trading =/= predicting stuff once. Either way, this was the top for a good while.
See: Confabulation, Clustering illusion, Insensitivity to sample size, Neglect of probability, Anecdotal fallacy, Illusion of validity, Masked man fallacy, Recency illusion, Gambler’s fallacy, Hot-hand fallacy, Illusory correlation, Pareidolia, Anthropomorphism
IvanLabrie wlrfxtrader
@wlrfxtrader, what do you mean with all of this?
Hey @IvanLabrie, I'm pretty new to this, so I thought I ask... You mention sentiment as a tool. Do you have any reliable way of telling what the sentiment is? Is there something I missed? Or is it all just reading up on Twitter, reddit, etc. all day long? Thanks!
+1 Reply
IvanLabrie ZoltanBalogh
@ZoltanBalogh, hi! I use two tools, one is a proprietary indicator called Range movement, which does a great job capturing this and the other is researching on twitter, forums, localbitcoins, chatting with clients, people I know. It's more of an art, the latter, but highly effective.
ZoltanBalogh IvanLabrie
@IvanLabrie, its fun also, the chating and reading up part i mean but requires a lot of time. Im curious how you can read up on so many trades... But to be honest this could be a great job for an AI or an actual person, and Im sure many would pay for this info. I know I would cause it could save me a lot of time. A Sentiment mapper. :)) Thanks.
+1 Reply
kaka900 ZoltanBalogh
@ZoltanBalogh, Actually Ivan is doing it for us already and keeping us informed, his paid subscription is worth every penny ;)

The shitstorm begins. Personally I am cautiously opening shorts.
+1 Reply
@BRRD, great. It's time people start to be aware of all the risks in BTC now. I am not shorting, but will watch to go long after everyone gives up. The costs of margin funding and the choppy nature of BTC declines makes it not too productive.
+1 Reply
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