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Bitcoin - Price Behaviour

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There is a clear downward trend towards 8000. The recent price spike was caused by ...

https://www.bbc.com/news/technology-48799155

https://www.coindesk.com/iranian-authorities-shut-down-two-crypto-mining-farms-amid-power-spike

https://thenextweb.com/hardfork/2019/06/28/iran-seizes-1000-bitcoin-miners-says-mining-with-state-electricity-is-a-no-no/

Once other miners have picked up the slack the price should start to come down again nicely. 

4695c65a26a1449aa6dfdc405aa362ec.jpg

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@TheGuru12,

You state there is a clear downtrend towards 8000. Now you may be right but are you able to articulate how you have come to such a conclusion?

I am going to include below the 'Monthly', 'Weekly' and 'Daily' from IG's own platform.

Bitcoin_20190630_18_12.png.b2116e79fa97c810ed3834b35205231a.png

Now looking at the 'Monthly' chart it is not obvious to me that there is a clear downtrend in play towards 8000. That is not say that Bitcoin's price will not hit that price level. The thing with Bitcoin is that you can pick any price between say $7k and $20k and predict that it will hit that price within the next 12 months and guess what is most probably will, such is the extreme volatility. 

Bitcoin_20190630_18_14.png.1e1124c42a54d0e7353a80b1a04f4aea.png

If anything the 'Weekly' is showing a clear trend reversal and breakout. Now one could argue that until the price surpasses its all time high and stay above it then it is still in a downtrend. 

Bitcoin_20190630_18_16.png.950c4d170fc963f68038a5df488518bd.png

Now what is to say that Bitcoin is not testing the $11k level as support? It seems to have more buyers than sellers at this particular price point for now. As Caseynotes would say there is a battle going on and one of them will emerge the winner. Who I don't know but it the buyers emerge a winner then it is unlikely to go down to $8k. You need the sellers to emerge victorious for you to see your downtrend in play. 

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8 minutes ago, TheGuru12 said:

Nearly there 😄 8K and below here we come! 

yeh i can imagine that there will be a pull back to around these levels. 

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With the Bitcoin halving event in 2020 I cannot see Bitcoin making new lows. I could be wrong but time will tell. 

Bitcoin is correction after a parabolic rise. This would occur with any asset and is not just relevant for Bitcoin. Even if $8k comes it is not bad as Bitcoin was around $3.5k earlier on in the year!

Bitcoin has a right to sell off just like any other asset. It seems that the profit takers are taking profits, stop losses are being triggered and new shorts opening which is amplifying the move downwards.

The larger the move up, the larger the correction. That is all we are seeing right now. 

For me the $10k level is still a critical level and Bitcoin will need to stay above that level for a period of time and consolidate before any next move upwards.

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@TheGuru12,

If Bitcoin goes down to $6k level by the end of the week then I would have to seriously think about adding to my XBT Provider One Bitcoin Investment.

Is your trading strategy based on rumours? 

I hope you are shorting Bitcoin all the way down to $6k!

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Has anything changed in my mind?

Yes the correction may be deeper than the $9k to $10k level which I first envisaged. Bitcoin has gone below its 20 DMA. This will attract the aggressive trend followers to initiate short positions on Bitcoin. 

Bitcoin is heading towards its 50 DMA. If this is breached due to profit taking, stop losses being triggered and new shorts opening then it is possible for Bitcoin to be heading towards $8.9k. If this happened then it would be imperative that Bitcoin defended its 100 DMA on the 'daily'.

There is a shorting opportunity here but one must remember that Bitcoin is a volatile beast and it can change very quickly the direction it is 'charging' in. 

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Bitcoin is struggling to stay above $10k at the moment so it will be interesting to see how Asia reacts. 

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39 minutes ago, TrendFollower said:

Bitcoin is struggling to stay above $10k at the moment so it will be interesting to see how Asia reacts. 

Does Asia have a significant influence of BC price movements? If so, do you know why?

Are you in any trades at the movement?

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Yes Asia plays an important part. Just read about Japan and other smaller countries within Asia like Korea, etc. The reason is that the Asians have embraced crypto and there is a big market there. 

I am invested in Bitcoin and Ether from a long term perspective using XBT Provider One products. You can see my thread in relation to that under Crypto / Blockchain.

I trade Bitcoin, Ether, Litecoin, Bitcoin Cash, Ripple and Stellar both on the long side and short side. I just admit I have not traded EOS and NEO yet.

What about you?

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It is 9:20 pm UK time and Bitcoin just hit $10.9k and seems to be heading for $11k. 

Now of course this could go down to $8k. I do not dispute that I simply do not know. If you put the media 'market noise' to one side with so called Crypto experts predicting prices to the moon and Crypto critics and sceptics predicting the price crashing and making new lows then how does one really know that the price is going to go down to $8k?

The one thing I have learnt about Bitcoin is that it can do what you least expect, when you least expect it. Expect the unexpected!

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I have put an interesting post to try and offer a balanced view on the Bitcoin Trend Following thread. Bias is something which can influence us all and lead us to make wrong decisions. There can be positive and negative bias. One could argue that I may have a positive bias on Bitcoin based on the reading and research I have conducted. However, I am under no illusion that is it perfectly plausible that Bitcoin fails and the price goes down to very low levels. 

This is why I am only interested in trading Bitcoin from a price action perspective even though I am interested in Bitcoin from a fundamental perspective and follow information and news in relation to Cryptocurrencies, Blockchain and Tokenisation. 

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Bitcoin hit just shy of $11.6k. Is this a short covering rally? It could be. We shall find out shortly. 

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I stated my personal view of $10k being that psychological and critical price point. It seems Bitcoin is defending that level rather well. 

Bitcoin in its recent parabolic move to above $13k crushed several resistance price points. This in itself is an extremely bullish sign. If you are a trader that uses 'Support and Resistance' and have witnessed over several timeframes Bitcoin barging through several resistance areas then what do you do? Do you put your bias and personal view to one side and trade based on the positive price action or do you stick to your emotionally charged opinions?

I am not suggesting that Bitcoin will not go below $10k pretty soon. The reality is that I simply do not know. If one looks at 'Odds and Probability' then right now there are more indicators supporting a potential upward move than a bigger downward move. Now these indicators could be blown away such is the extreme volatility in Bitcoin. 

Based on a likely probable outcome then Bitcoin is going to try and exceed $13k price level. This is based on price action, momentum, strength of trend, volume, etc. What we have experienced is merely extreme volatility, that is all and it is what most Crypto Traders expect and are fully used to. Yes, I could be wrong and Bitcoin goes down to $8k or $5k or whatever. If that happens then so be it. I will expect from myself to be wise enough to short that opportunity as I want to trade on the price action rather than my personal views. There is nothing wrong with having personal views but this will be based on the type of quality material we read and the type of people we communicate with. These factors will heavily influence our views on Bitcoin.

One must ignore 'Market Noise' and concentrate on the trading the 'Price Action'

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14 minutes ago, TrendFollower said:

Bitcoin in its recent parabolic move to above $13k crushed several resistance price points. This in itself is an extremely bullish sign. If you are a trader that uses 'Support and Resistance' and have witnessed over several timeframes Bitcoin barging through several resistance areas then what do you do? Do you put your bias and personal view to one side and trade based on the positive price action or do you stick to your emotionally charged opinions?

You don't seem to understand what support and resistance is, what it signifies, or how to use it. S/R levels just offer the opportunity to catch a lift with the big players, it doesn't matter which direction that might be, the important thing is going with them and not against them. If price is barging through multiple levels that's fine because you're already aboard, you got aboard at the last turning point, which tends to be at a S/R level.

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Trader bias, personal opinions and emotions can means traders don’t actually do as you have suggested. You have made as assumption based on your knowledge and experience that traders would do as you state.

You don’t seem to understand the point I was trying to make. Saying trading based on price action or trading with the trend is easy. Talk is cheap. You would be surprised how many traders are following an asset and they are proficient with technical analysis but their personal views and biases simply do not allow them to trade based on price action and trends. This is even after they are following the asset. There are traders that use support and resistance levels to make trading decisions. You will be surprised how many based on their personal views cannot use support and resistance levels effectively in their trading decisions.

You are missing the point I am making. Maybe I did not articulate it too well.

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Support and resistance levels for Bitcoin can identify potential turning points. They are just potential turning points. It can highlight potential price areas where there could be a struggle to go through the resistance area or struggle to go down below the support area.

It is very easy to understand Support and Resistance. There are a lot of books out there and a lot of material on the Internet. However it is extremely difficult to apply it effectively. It is far easier to talk about it and write about it but to actually use if effectively is actually quite difficult. It is based on historical price action like many technical analysis based signals and indicators. Yes one could use it to try and predict or make an assumption on future price action.

If you read my threads then you will know that I use the psychological price points in terms of round numbers. Now you will most probably be aware that I follow a longer term timeframe in terms of ‘daily’ so such price points are more relevant rather than for shorter timeframes.

Different traders will have a different level of understanding for Support and Resistance and will use it in different ways. To some they may look at those price points which could lead to potential trend reversals, those price points where price tends to get stuck in a range and you tend to see sideways price activity. I like round numbers when looking at the ‘daily’ and in my experience when trading Commodities and to a certain degree Cryptocurrencies these price levels become very relevant. 

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Bitcoin hit $12073.10 overnight. It is currently over 4% up and trading at around $11858 level. 

I want to see if Bitcoin does indeed go down to $8k or even $6k or lower. 

The more the Governments around the world try and ban Bitcoin and other Cryptos the more stronger Bitcoin and the rest are going to get. 

Some people on the IG Community are predicting that Bitcoin will fail and the next generation of Cryptos may succeed. I ask the question what if Bitcoin adapts and improves so that it can succeed? 

Bitcoin is currently in its 'Bull Phase' so to bet against it when we all know that it experiences severe volatility is pretty dangerous. I would be surprised if momentum and strength of trend did not take Bitcoin beyond $13k pretty shortly. 

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If Bitcoin was a commodity or an individual stock then one must ask the question in which direction do they think the trend will go. I think after a consolidation period the answer is upwards.

Yes this is an assumption and prediction and I could easily be wrong such is the nature of the beast we are dealing with. I think the momentum and traction is strong enough to take Bitcoin upwards once then current breather has finished.

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One of the beauties of Crypto trading is that even though it is the 4th July that should not affect Crypto trading across the world. It will be interesting to see how Asia reacts tonight. 

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I read an interesting article this morning that highlighted that Bitcoin has seen positive gains in the previous four US Independence Days. If it manages it today then it would be the fifth in a row. 

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Bitcoin is now around $10.8k levels. I still maintain that $10k is an important level Bitcoin must defend for confidence in the asset class. For me it is a critical level and a very important psychological level.

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I concur - Looking at 10K for a long position . 

What happened this morning to push BTC down 6%?

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@FFS_Daytrader,

I personally think there is a lot of speculative and trading capital when it comes to Bitcoin and other Cryptocurrencies. You will find profit taking, short term trading opportunities for those who trade ranges, stop losses being triggered and not forgetting shorts opening. 

Bitcoin and others are volatile and what we are seeing is volatility that is all.

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Posted (edited)

Bitcoin is currently trading at around $11.5k. So it seems it is trying to consolidate at over $11k rather than my personal critical limit of $10k though I think the range will be around $10k to $12k based on recent price action. 

This bodes well for Bitcoin. It also highlights how one must ignore 'market noise' which includes those who have a negative bias on Bitcoin on the IG Community. I get it that certain people are sceptical of Bitcoin and Cryptocurrencies in general. I also accept that 90% of Crypto's are junk. I really do believe this. I also appreciate that there will be many who do not have the technical understanding and appreciation of digital currencies and Blockchain and others whose knowledge derives from what they read or are told by the media.

The above can influence traders on IG. One trader was predicting Bitcoin hitting $8k. It is no where near. This was without very little evidence, data, information or even personal thoughts as to why it would hit $8k. Another mentioned a rumour that Bitcoin was going to hit $6k. This is in my view an example of where a traders personal negative bias on this asset class comes out. It is sort of like an unconscious bias.

My view is that Bitcoin's current price behaviour is based on current sentiment and that current sentiment is as strong and positive as it has ever been. I appreciate Bitcoin is not perfect. It has its flaws but nevertheless in this digital revolution it will play some role and more importantly the technology behind it, Blockchain, will play a very important role. 

Edited by TrendFollower

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