Bitcoin: continuation of a downtrend?
تم تحديثه
Hello everyone,
Welcome to my first idea here and I want to tell you why this market structure in Bitcoin suggests that we'll see new lows.
1. The most obvious reason why I think we'll continue the downtrend is the general overbought levels of crypto markets. Even after we made this correction to 6K some fundamental indicators tell us that it might not be enough, for example the NVT ratio that measures the network value to the transacted volume (represents the real use of bitcoin) is highest since 2014 [I'm not sure if TV allows to post external links, so just search it]. Google searches are also down 10 times from the top, indicating low interest in cryptocurrencies. Combined with the lowering volume (ath on Coinbase 84K a day, now 7K) and buying pressure (rallies in February and April were not driven by the new money, but by the traders, who were already in the market), it proposes that the consolidation we're in now is just a distribution before retracing to the mean.
2. You've probably heard about the Wall Street Cheat Sheet and though I don't think it can be applied to all bubbles and it's subjective, I would say we're in a denial phase. The community finds crazy reasons for why we're about to reverse. First, we had a Chinese New Year, then a Consensus pump and now 'every 6th day of a month'. So, when everyone thinks the bottom is in, it's not (and vice versa). If you remember, TradingView was flooded with 3K 1k ideas in April and we pumped, now we're talking about breaking 10K and going to 100K in 2018 after a 10% move up, what's really likely to happen? The majority entered at 5K and higher and many are still in profits or in small losses, bitfinex longs/shorts are 3/2.
3. From the TA point of view, we have a big symmetrical triangle formation that is actually a continuation pattern, but can be a reversal in some situations, now it's not likely to break out. We have a daily bearish divergence on OBV oscillator, Commodity Channel Index and almost on RSI (if we make anther push to 7800-8000 we'll see it too). From a bullish perspective MACD has crossed on daily and RSI is in oversold territory, but it can stay there longer than you think like it stayed overbought all the way up in Q4 2017). Weekly and monthly indicators are neutral. We're still below 50W MA that sits at 7826. 21D MA at 7655 has also proven to be the resistance and it looks like we can't stay above it for longer than a few hours. There is also a rising channel with falling volume and the longer we stay in it, the more painful the drop is going to be when/if we break it.
4. It's not a secret that the price of bitcoin is manipulated, recently there has been some bart action and at the moment it looks more like a stop hunt, rather than an attempt to pump it. We also know that bitcoin dumped after the futures were launched (December, 17), so there is a great chance that people who shorted it control the market. Since they'd likely want to close the contracts at the maximun profit, June 29(expiry date) might be next to the bottom.
To sum this all up, though I'm convinced that it'll go down 99%, I wouldn't take any leveraged positions at the moment.
In the next idea I'll discuss the possible targets for the bottom.
Welcome to my first idea here and I want to tell you why this market structure in Bitcoin suggests that we'll see new lows.
1. The most obvious reason why I think we'll continue the downtrend is the general overbought levels of crypto markets. Even after we made this correction to 6K some fundamental indicators tell us that it might not be enough, for example the NVT ratio that measures the network value to the transacted volume (represents the real use of bitcoin) is highest since 2014 [I'm not sure if TV allows to post external links, so just search it]. Google searches are also down 10 times from the top, indicating low interest in cryptocurrencies. Combined with the lowering volume (ath on Coinbase 84K a day, now 7K) and buying pressure (rallies in February and April were not driven by the new money, but by the traders, who were already in the market), it proposes that the consolidation we're in now is just a distribution before retracing to the mean.
2. You've probably heard about the Wall Street Cheat Sheet and though I don't think it can be applied to all bubbles and it's subjective, I would say we're in a denial phase. The community finds crazy reasons for why we're about to reverse. First, we had a Chinese New Year, then a Consensus pump and now 'every 6th day of a month'. So, when everyone thinks the bottom is in, it's not (and vice versa). If you remember, TradingView was flooded with 3K 1k ideas in April and we pumped, now we're talking about breaking 10K and going to 100K in 2018 after a 10% move up, what's really likely to happen? The majority entered at 5K and higher and many are still in profits or in small losses, bitfinex longs/shorts are 3/2.
3. From the TA point of view, we have a big symmetrical triangle formation that is actually a continuation pattern, but can be a reversal in some situations, now it's not likely to break out. We have a daily bearish divergence on OBV oscillator, Commodity Channel Index and almost on RSI (if we make anther push to 7800-8000 we'll see it too). From a bullish perspective MACD has crossed on daily and RSI is in oversold territory, but it can stay there longer than you think like it stayed overbought all the way up in Q4 2017). Weekly and monthly indicators are neutral. We're still below 50W MA that sits at 7826. 21D MA at 7655 has also proven to be the resistance and it looks like we can't stay above it for longer than a few hours. There is also a rising channel with falling volume and the longer we stay in it, the more painful the drop is going to be when/if we break it.
4. It's not a secret that the price of bitcoin is manipulated, recently there has been some bart action and at the moment it looks more like a stop hunt, rather than an attempt to pump it. We also know that bitcoin dumped after the futures were launched (December, 17), so there is a great chance that people who shorted it control the market. Since they'd likely want to close the contracts at the maximun profit, June 29(expiry date) might be next to the bottom.
To sum this all up, though I'm convinced that it'll go down 99%, I wouldn't take any leveraged positions at the moment.
In the next idea I'll discuss the possible targets for the bottom.
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From th EW perspective (copied description for the waves from Wikipedia): ملاحظة
Closer look at the rising channel (bear flag):ملاحظة
Measured move for the flag below the triangle support:ملاحظة
1.618 extension from the previous move down is also around 6100:ملاحظة
21 MA:ملاحظة
We're actually trapped between 1Y and 50W MA:ملاحظة
Very interesting trendline by the way:ملاحظة
CNN bullish - ccn.com/bitcoin-price-breakout-days-away-long-term-trend-bullish-analyst/You know what is coming next :)
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Not CNN, it's CNBCملاحظة
Fractal here:ملاحظة
Only a 60$ move down and we go to the hell. If you assume that there is an ascending triangle and that it'll break up now is actually a very good risk/reward long with a tight stop at ~7550ملاحظة
But if it's anything like a triangle, I think the pennant is more suitable:ملاحظة
Not an ascending triangleملاحظة
What does this mean hmmmmmmmmmmملاحظة
Just on timeملاحظة
Oh jeez it happened so fast. Getting closer to the symmetrical triangle support, if we break it lower lows are almost confirmed. Slight bull div:ملاحظة
Strong bull div on 1H:ملاحظة
OoOopsملاحظة
It might still be a fake breakdown (not likely).ملاحظة
Making a new analysis where I'm gonna be talking about the possible bottomملاحظة
Below 7K again, ponzi over?ملاحظة
If someone is reading it, small advice from me: this moments in the market are the most dangerous: you go long in anticipation of a bounce that will never happen and go short at the bottom. Ignore all minor supports, they're gonna be broken. Select several long term levels according to your trading strategy, set your orders there and don't change it. If you're right (and most likely you are because you're wrong when you're emotional) it's cool, if you're wrong identify what should be changed in you strategy. Simple and it works. Good luck.ملاحظة
This one looks like a strong support:ملاحظة
Closed 1/10 of my short from 9K hereملاحظة
(20% are already closed)ملاحظة
Actually this is the best case scenario for bitcoin, we better have a panic low than a slow grind down to even lower levelsملاحظة
Will 6666 hold hmmملاحظة
- Bogdanoff, he bought- Good, release the fud
cointelegraph.com/news/all-of-top-100-cryptocurrencies-see-red-amidst-cftc-price-manipulation-probe
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From the EW perspective we might be making the 5th wave and as the previous ones were not extended this one might be (2.618 coincides with my long-term support, but gonna talk about this in the next analysis)ملاحظة
Weekly close in 5 hours, reasonable to expect a pump to retest our symmetrical triangle and maybe trap some retailers with triple bottomملاحظة
- Then crash it with the exact same Korea newstechcrunch.com/2018/06/10/korean-crypto-exchange-coinrail-loses-over-40m-in-tokens-following-a-hack/
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Imagine holding EOSملاحظة
Bitstamp-Bitfinexملاحظة
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Shorts keep rising and price fails to break down, would be nice to get a pump to 7k so some leveraged positions get liquidatedملاحظة
The flag is too good to be trueملاحظة
An update here:
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