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Bitcoin - Price Behaviour

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@draa46,

Anything is possible when it comes to Bitcoin and Cryptocurrencies. The only reason why it may not continue in its downtrend is the 'HALVING'. If you look at the historical patterns for Bitcoin around a year before 'Halving' takes place then you will see that there is high chance of upside from where we are. It will all be down to how much demand and risk appetite there is for Bitcoin to be acquired both in the physical / digital sense and through futures and derivatives. If there is high institutional demand then we could see Bitcoin come out of the downtrend. 

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I think the question right now is whether Fidelity Digital Assets in the next few weeks will begin acquiring Bitcoin and other Cryptocurrencies or whether it already has and is partly responsible for the recent price rises? 

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Bitcoin hit $5982.10 so it is getting very close to the psychological level of $6,000.

Until Bitcoin surpasses the $6.6k to $7.3k levels there will still be many who agree that Bitcoin is in a longer term downtrend. We are now approaching a critical period for Bitcoin. So far it has done extremely well and there will be many traders who have profited from the longer term downtrend and the recent uptrend.

 

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What is interesting if reports are to be believed is that during this uptrend from Bitcoin the 'Short' positions are rising. If this is true then this is very bullish indeed. These shorts will have to be closed at some point which indicates rising prices from here.

Also key support and resistance are being taken out by Bitcoin so again a bullish indicator.

There is the risk that this could be a false rally but it really does not matter if one trades on current price action. There is nothing wrong with trading and profiting from a false rally in a downtrend as long as one accepts that is what it is or could be.

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I mentioned the 'HALVING' for Bitcoin in a previous post in this thread and other threads and I can see others have picked up on this concept too. It is widely being reported in the media so one must be careful of course with 'Market Noise'

The key question is whether this event will cause the Bitcoin price to rise? The price action is certainly supporting this notion at the moment. 

When you look at the 20, 50 and 100 DMA then they are all sloping upwards and the current price is above all of these. It is also trading above its 200 DMA so there are strong reasons to go 'Long' on Bitcoin if anyone is not already long. The downside risks are the extreme volatility and the continuation of the longer term downtrend.

This could be countered by historical patterns around 'halving' but the 'halving' does not offer any guarantee over future price behaviour. It does however very slightly tilt the odds and probability in your favour of a new upward trend forming prior to the 'halving' based on historical patterns around this concept. 

  • Another key consideration is the increase in volume which is supporting Bitcoin's price action. 
  • The price is trading above the 'Parabolic SAR' which is another positive and bullish indicator.

When you apply 'Trend Lines' and then take into account any 'Support and Resistance' you will find a very positive and bullish argument for Bitcoin's price increasing. This does not necessarily mean it will continue increasing but all we can do as traders is make an informed trading decision based on our risk appetite, signals/indicators being used, trading style and trading strategy adopted. 

 

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It is being reported that the Bitcoin price is being backed by a diamond breakout on the '4 Hour Chart'. 

I am not sure if this is bullish or bearish!

Diamond breakouts tend to occur in relation to market tops unless my understanding is wrong which it could be. Maybe this is bullish short term but bearish thereafter. 

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I touched upon this in a previous post on this thread that it is reported that Fidelity are going to offer Crypto trading. Now Fidelity has around $7 trillion in assets under management. It is as big as they come. What an endorsement for Bitcoin. Now who is right? A $7 trillion AUM firm called Fidelity or those on the IG Community who think Bitcoin is garbage and will eventually end up going down to zero? Now it is not out of the question that Fidelity could have got this wrong but when enough support by large institutions is offered to Bitcoin then they will all together ensure Bitcoin survives in one form or another. 

Fidelity is being proactive. It is showing great trust, support and confidence in Bitcoin. Maybe it has high educated and intelligence staff that really understand the Crypto Revolution that we are witnessing and they have a more open mind which is balanced rather than just simply negative against Bitcoin.

Now E-Trade has already entered this space but it is more focussed on the retail side. What Fidelity will do is attract institutional investors like pensions, hedge funds and High Net Worth (HNW) clients. The other thing worth noting is that Fidelity will offer a Custodian service which again is another sign of them being ahead of the curve against its rivals and competitors.

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There you go. Bitcoin is trading at the time of this post at $6063.43. It hit overnight $6113.70. 

I think Bitcoin will face a fair bit of resistance when looking at the 'daily' going forwards and it is going to be hard to surpass $6.5k but if it does which is looking more likely now than it was say a month ago then there could be a very important longer term trend change for me.

This is a very important period coming in relation to the price behaviour of Bitcoin.

I do also wonder if capital is flowing out of Stocks and Commodities and moving into the Cryptocurrency space and primarily Bitcoin? I do not know but I do wonder if this is happening. 

 

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There seems to be a disconnect forming between Bitcoin and the 'Alt Coins' that are available on IG's platform. Bitcoin seems to be leading the way upwards and the others do not seem to be following this path.

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Bitcoin hit $6335.50 overnight. It is over 3% up at the time of writing this post. It is going strong.

It is approaching some key support zones and the question is whether it will struggle and battle through or whether it is just going to blitz through with strength. I do not know but we are about to find out. 

It also seems that the disconnect may reverse and the 'Alt Coins' may follow Bitcoin's path albeit they are playing catch up. However, it is not unusual for some of these 'Alt Coins' to return double digit percentage returns in one day or even one evening!

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Bitcoin is now showing for me a more clearer and decisive trend reversal pattern / confirmation. 

Traders who were short Bitcoin should have liquidated their position and taken their profits. 

For me now there is a bullish upward trend in Bitcoin which has been confirmed by the price behaviour. 

I am going to include the latest 'Parabolic SAR' indicator from the 'daily' below:

Bitcoin_20190511_10_21.png.f6ff4a5556ef623c488038394a81f404.png

The price is clearly well above the dots indicating a very bullish trend reversal and a very bullish upward pattern. Yes  Bitcoin could face a little bit of resistance along the way and large pullbacks which are expected of course with plenty of volatility but Bitcoin is the asset which is really delivering on returns at the moment.

Bitcoin is outperforming most other assets hands down from the start of this year to date. Those who are negative and think Bitcoin is going to zero must put their personal emotions and bias to one side and trade the opportunity in front of them rather than be stubborn and keep on stating Bitcoin is rubbish and Bitcoin is going to zero, etc. 

Bitcoin may find a bit of resistance at the $7.3k level and then $8.2k level but these will be the targets Bitcoin will aim for going forwards. Bitcoin is also showing another important factor. It seems to move big over the weekend periods. I have experienced such moves over the past few years so this is not uncommon for me. Some of you may have been taken by surprise over this move but if you have been following Cryptocurrencies for a few years then you will appreciate that this is now considered pretty much normal and expected. They move like this when you least expect them to move.

This is another reason why if your stop losses are too tight then you will be regularly stopped out and miss lots of these opportunities. Setting effective stop losses is a key part of trading Cryptocurrencies. I do not have the magic answer as everyone's risk tolerance is different but from my experience stop losses cannot be too tight when trading Cryptocurrencies as otherwise you will just be left with loss after loss. Also when you are in profit you must set a trailing stop to ensure you leave the position with a profit.

Cryptocurrencies can take your profit away as quick as it gives your profit. 

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Right here goes. Lots of people have messaged me stating surely Cryptocurrencies are going to fall and what is different this time. 

Where do I start? First of all, Cryptocurrencies as an asset class has been confirmed and is establishing itself so right now it does not seem to be going anywhere anytime soon.

Bitcoin has not crashed and gone down to zero. Bitcoin has not even gone down to the $2k levels or $1k levels these so called experts and credible people were suggesting. This highlights how dangerous the media really is. On what evidence were they suggesting that Bitcoin would go down to $2k and $1k levels? 'MARKET NOISE. Likewise Bitcoin has not gone up to the $50k and $100k levels that others pro Bitcoin supporters were suggesting. Again this 'Market Noise' works both ways when presenting arguments and predictions. 

The price action which is what is happening currently and what is happening now is the best and most important indicator. The future has not been written but the path and destination of the future can change at any point when it comes to price behaviour of an asset. The future is not a given or written in stone. The future does not have to be the same as the past. There is no rule on earth which suggests this must be the case.

  • The trend is strong
  • The trend is bullish
  • The price action is positive
  • Halving Event & what has happened in previous Halving Events
  • Increased momentum and traction in Bitcoin and the asset class
  • Institutional Investors like Fidelity coming on board

India is still on the sidelines and should it come on board the journey then this light a fire below Bitcoin. If the US were to approve an ETF for Bitcoin then this too could send Bitcoin way above current price levels. 

There is nothing wrong in being negative about Bitcoin or Cryptocurrencies but those who think it is going to zero and is garbage need to offer far more compelling reasons and articulate reasoned arguments for their views rather than simply something they have read on the online media which they are blindly following or repeating. Online media can be biased both ways pro Bitcoin and against Bitcoin. 

From a trading perspective if you put the FUNDAMENTALS to one side and just look at the price action then there is a very strong trend to trade. Full Stop. Is anything else trending stronger with greater momentum right now in other asset classes?

What other major asset has outperformed Bitcoin since 1st January 2019?

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Bitcoin since 1st January 2019 to date has gained more than around 84%, outperforming most traditional asset classes and commodities.

It seems that the Bitcoin price has moved from a parabolic stage to vertical thus raising the possibility of the Bitcoin price rising from $6,300 to over $7,000. $7,000 is now looking like it is on the cards shortly. Yes there will be largish pullbacks but $7,000 is coming.

For me Bitcoin seems to be in a Bull Market right now unless there is any counter evidence to suggest otherwise. 

One must not forget the potential of a short squeeze. Bitcoin was being heavily shorted and if the shorts have to liquidate their positions then what do you all think is going to happen to the price of Bitcoin?

Now imagine if these same traders who liquidate their shorts then initiate new long positions again what do you all think is going to happen to the price of Bitcoin?

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When Bitcoin has finished its current upward drive then it is likely to correct around the $5.8k to $6.6k level.

So expect a quick and sharp pullback to these potential levels. 

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Bitcoin has just hit $7048.70. Very impressive price behaviour and very quick too!

How high it will go on this leg upwards none of us know for sure. It could go as high as $7.3k depending on the extent of the 'short squeeze'. 

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Posted (edited)

Just look at the 'Rate of Change' since the start of 2019.

Bitcoin_20190511_23_03.png.b8a90af1cc0d22cb53bf1622bd41326e.png

It is at its highest point this year which bodes very well for a strong upward move. The 'Rate of Change' indicator is an indicator used to measure momentum and boy does Bitcoin have some serious momentum behind it. 

 

Edited by TrendFollower

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Bitcoin is up another 8% at the time of writing this post. What a weekend. I have stated many times in the past in different threads and posts that Bitcoin and Cryptocurrencies do tend to perform remarkably well in a bull run during weekends. This weekend just helps to support that point. 

Bitcoin has hit $7577.90. 

It seems to be heading towards $8276.

There is going to be a mighty pullback / correction. The larger the move upwards, the larger the pullback / correction will be. 

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There is the potential for a mighty short squeeze when the futures market reopens. There is also be the possibility for new longs to open in the futures market who have missed this large rally over the weekend. The big drop over a few days will come, that I have no doubt about. 

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There was a significant drop in the price of Bitcoin and other alt coins and this will have triggered a lot of tight stop losses for any new entrants to the trading opportunity. 

This is typical of Bitcoin and Alt Coins and is why a lot of traders struggle to trade Cryptos. The volatility is stomach churning. One must either have large capital or wider stop losses. If they have neither then they must day trade as anything else will wipe their capital out. 

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Posted (edited)

Bitcoin is now trading around $6.9k. 

I think the pullback will def. take Bitcoin back to $6.6k levels for sure. If it goes below this then $6.1k is on the cards. If this happens then it will be extremely healthy in my personal opinion. 

There may be a short term 'shorting' opportunity on Bitcoin before the next move upwards which is coming. 

Bitcoin was valued at $0.07 on August 16, 2010. It is trading near $6,000 right now.  That is a staggering return of over 8.5 million percent in less than a decade. There is no other asset or currency which has generated similar returns in the same period from my understanding. If anyone does know of any then please do share with the IG Community.

Edited by TrendFollower

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It is around 5:00 am UK time and Bitcoin has held above $7k which shows some short term resilience. It is reported that the $7.5k it hit yesterday was the highest since August 2018. That seemed way overbought and it is currently trading around the $7k level. 

This to me seems like we are in a bull market unless it is a false breakout of monumental proportions. 

It is also being reported that the volume over the weekend and especially over the past 24-28 hours was a record high. 

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Bitcoin hit $8180.30 overnight. This is a rally of monumental proportions. 

The shorts are truly being squeezed!

It has taken around five days for Bitcoin to move up from $6k to $8k. Very impressive price behaviour. 

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At some point shortly there will be a much needed (in my personal opinion) correction / pullback. It will be quick and sharp but the decline will be large due to the large move upwards we have all witnessed. This will be an extremely healthy sign before the next big move upwards towards $10,000 materialises.

I do not know if or how much more Bitcoin will go up on this specific upward rally so ensure you keep your 'long' trades open until a trend reversal as I think the opportunity to take profits and then buy back in on the dip should in theory present itself. 

For those looking for longer term investments in Bitcoin then they may wish to consider XBT Provider One which is available in both SEK and EUR currencies. This is more for a buy and hold strategy. This is what I personally use for my longer term Bitcoin and Ether investments.

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When I see vertical price action like this then I get the feeling and it is only a gut feeling that we are seeing a monumental short squeeze at the moment hence why the Bitcoin chart is looking vertical.

I think this is one of the many factors in play for the price behaviour for Bitcoin. 

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Bitcoin is still remarkably holding above $8k level.

It seems that capital is shifting within the different Cryptocurrencies and you can begin to see different Crypto's shoot up at different times. So Bitcoin Cash and Litecoin were rampant previously. Bitcoin before that but Ether now. Stellar and Ripple (especially Ripple) seem to be shooting up now and some of these tend to move in tandem. They seem to like moving in pairs.

 

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This article highlights why Bitcoin is so important and why Central Governments are so scared of Bitcoin that they want to ban it. What they fail to understand is that by Governments trying to ban Bitcoin is the very reason why it will get stronger and stronger (supporting decentralisation argument). 

Bitcoin Threatens To 'Take Power' From The U.S. Federal Reserve

https://www.forbes.com/sites/billybambrough/2019/05/15/a-u-s-congressman-is-so-scared-of-bitcoin-and-crypto-he-wants-it-banned/

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The one thing is for sure. A bottom in Bitcoin has been confirmed.

If this was a false breakout and then it made a new lower bottom then I think it would totally shake the confidence of a lot of participants. As I have stated before there has got to be a sharp correction in Bitcoin coming very soon otherwise it is re-writing bull markets in Cryptocurrencies!

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