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Bitcoin - Price Behaviour

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Thank you @JamesIG.

I think the way Bitcoin's price is behaving, $10,000 looks on the cards sooner rather than later. 

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Here comes the big, sharp and quick drop that I was anticipating. This is in my opinion a healthy sign and very necessary. Bitcoin hit $6523.30 overnight but is back over $7k at the moment. 

The market participants were expecting a sharp drop hence increasing the potential for new shorts to open. 

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Bitcoin is back over £8k at the time of writing this post.

If anyone is interesting in trading Bitcoin then one must try and follow the price action of Bitcoin on a daily basis. There is nothing like good old fashioned following the price on a daily basis. This will help you get in tune with the behaviour of Bitcoin's price, how it behaves to certain types of news, spot patters and trends emerging, etc.

If you are someone who trades from a price action perspective then I think one must not get bogged down too much on whether you think Bitcoin will succeed or fail. One must not get emotional or let their ego get the better of them. One must simply trade based on the price action and the trend manifesting itself in-front of them. 

Ignoring Bitcoin and some of the other stronger trending Cryptocurrencies is like a trader stating they want to trade and make profits and trade the strongest trends but not Bitcoin or Cryptocurrencies because they may fail or not exist in 5 or10 years time. One must trade based on the price action now and not get bogged down in what may happen in 5 or 10 years time.

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Bitcoin is trading above its 20, 50, 100 and 200 DMA and is over $8000 at the time of writing this post. You will have heard me mention about the 'Upward Sloping Curves' for the Moving Averages. Well the 20, 50 and 100 DMA's curves have been sloping upwards for a while now which is a bullish indicator. However, what has started to happen (and this can only be spotted if you monitor the price action daily) is that the 200 DMA is beginning to look like it could may begin to start sloping upwards. This will be a very bullish long term indicator. I include the chart below to illustrate this point.

Bitcoin_20190524_18_43.png.e34116b331e5ef51834b11e321e9f697.png

Now trading Cryptocurrencies is extremely high risk due to the extreme volatility. However if you can monitor the price action and look at certain basic indicators to help provide you with signals to use then it can be as simple as you want it to be. 

If you look at the chart below then you will see an increase in the volume both on the upward moves and the downward moves which supports the current price action both (upwards and downwards). 

Bitcoin_20190524_18_45.png.a6ebd4c2b06607f1aa625c7de4e193cb.png

Bitcoin is looking more likely to try for $10,000 than it is to try for $1000 or zero in my personal opinion. Of course this is Bitcoin and it could drop to $7k or even $6.5k over the course of just a few days with large drops so nerves of steel is required and a high tolerance to volatility and risk is needed.

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Bitcoin seems to have resistance at around the $8000 - $8200 range. If it breaks through then it is going to be when traders least expect it. So what ends up happening is that traders have been stopped out due to the extreme volatility and are not in the position when the sharp upward move comes thus missing out. There also seems to be support in the $7000 - $7700 so any drop in this zone may be a potential entry point for those who have not entered or do not already have a trading position in Bitcoin. 

Of course the risk remains that this goes down to the $6k to $6.7k levels but Bitcoin seems to be bullish, seems to have momentum, the trend is strong, the chart and technicals are showing 'positive bias' towards an upward move. 

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Bitcoin just hit $8796.10 and is up nearly 8% on Sunday evening at 9:22 pm. I have stated on many threads and posts that some of the best gains on Cryptocurrencies come over the weekend when it is in a strong bullish phase. The price action is time and again supporting my statements. 

Who would have thought around 9:00 pm on a Sunday evening UK time that Bitcoin would be flying high but it is a 24 hours and 7 days market and it literally never sleeps!

 

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It is amazing how Bitcoin performs throughout the night (UK time) when Asia is trading. 

Bitcoin hit $8961.40 overnight. It is currently trading $8726 area. 

Someone on another thread suggested they thought this was a bull trap. I am not so sure but Bitcoin will experience a large drop soon as that is Bitcoin. It will face many large drops along the way but it seems to be heading upwards. 

 

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I read a report this morning suggesting that this Bitcoin rally is a 'Dead Cat Bounce'. I do not know whether it is or not but does it matter? For a Cryptocurrency trader it is important to take advantage of bullish price action in both 'Long' and 'Short' directions as that is important not labels such as this.

I have absolutely no doubt that once this latest bullish rally is completed Bitcoin et al will see a few days of 'red waves' and price declines which will be sharp and quick. I think most experienced Cryptocurrencies will be expecting this. So what? Short term traders can short Bitcoin and those who do not want to short can merely wait on the sidelines for the selling to complete and once another rally commences go back long again.

Others can just hold their positions even with the sharp declines and ride it out. So for example if someone bought Bitcoin around the $4k levels and it is now nearly $9k then it does not matter even if Bitcoin declines around 1000 points as long the longer term trend is still in tact. These declines will occur as Bitcoin continues climbing up. What strategy a Cryptocurrency trader adopts will be down to their risk tolerance and trading philosophy. 

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A lot of Cryptocurrency traders have their eyes set on the $10k level. This is going to be a significant level which could attract a lot of capital back into this asset class. I think it is not a case of if but when this level will be breached. 

There are going to be some very strong dips along the way.

This is why I have invested in Bitcoin and just held via the XBT Provider One product for the past few years now. There is another thread for that which I have created a while back so please feel to have a look at that. 

 

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One of the strong dips which I mentioned in my previous post has arrived. They will be quick and sharp but they will come from time to time during this bull run. 

The $9k rejection was a clue. Also another clue was the attempt on £8.7k twice and declining from this point demonstrating to me a weakness in the trend and a likely correction imminent in Bitcoin. When following the price action one could see the wavering at this price point. 

Bitcoin_20190604_05_34.png.ad0aceb6e81c3ba92e515371cbc27347.png

I have highlighted the x2 price points at which the price began to decline and if you look back at how Cryptocurrencies tend to react to such price behaviour then it is normally followed by a drop. Now of course historical performance does not necessarily lead to the same future performance. 

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Bitcoin is correcting very aggressively and sharply. Now I have seen this so many times that it really does not bother or phase me any more. When this happens it presents a fantastic shorting opportunity. 

Bitcoin's uptrend is still in tact. The question I am asking is whether the $7000 level will hold and offer support or will it correct deeper to say the $6.5k level?

I think this correction once finished of course will present a better entry point to go 'Long' for those who have still not dipped their toe in but for now the short term traders will be shorting this pretty hard. 

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Bitcoin's current price behaviour seems to suggest a struggle to stay above $8000. Now this could be viewed as a weakness in the upward trend. 

The one thing I have learned about trading Bitcoin and Cryptocurrencies in general is that they can pop upwards in a bullish trend and drop downwards in a bearish trend when one least expects. 

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The current chart 'daily' and my gut instincts are telling me that the next breakout for Bitcoin is coming. It may have another go at breaking $9k and if it does then $10k is a serious price point which is could aim for. If it does not then there will be further consolidation but what I am unsure of is whether there is anymore major downside.

I have read reports suggesting there may be a 30% drop from here. When the online media start reporting this without any substantial information to support such statements, Bitcoin, historically just tends to do the opposite and shoot up when one least expects. 

Bitcoin is treading water right now. 

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Bitcoin is above $8.1k but it seems it is not going to go up without some sort of catalyst or driver. It also does not want to drop down too low either.

Consolidation is healthy for Bitcoin but just how volatile this phase will be I don't know. The impatient traders may get into a pickle. Those with tight stop losses will be stopped out due to the volatility. Of course they will all blame Bitcoin and the Cryptocurrencies rather than themselves. It is never the traders fault! It is always the asset they are trading.

Once traders can blame themselves instead of the asset, the broker, the platform then it will open their mind as to what needs to be done. 

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Any range traders in the house? Y’all be getting some good opportunities on this movement around 8k

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@PandaFace,

I think what I have found on the IG Community so far is that people are uncomfortable applying the same technical analysis they conduct for other assets on Bitcoin. I think this is partly because in their mind they think Bitcoin is rubbish and will fail and go to zero. Their emotions are not allowing them to trade the price action or the opportunity in front of them both 'Long' and 'Short'. With stop losses being applied through risk management it should not matter what the future holds for Bitcoin. A trader should cut out the 'noise' and trade the price action. The media are the biggest 'noise' providers. This influences traders emotions as the media when it releases negative stories on Bitcoin and this whole area stops the trader from trading what is the best performing asset in 2019, full stop. 

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The question I am asking myself is whether what we have witnessed is the pullback? I know so called experts and media reports are predicting 30% pullbacks but this may not happen at this juncture. But this is Bitcoin and it can drop without any notice (from a technical perspective). 

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Bitcoin is hovering around the $8.3k level. It has hit $8350.60 today so it will be interesting to see where this finishes by the time US markets close. 

Also remember it is the weekend coming up so Bitcoin can make big moves either direction. 

😉

  • Great! 1

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Posted (edited)
1 hour ago, TrendFollower said:

Bitcoin is hovering around the $8.3k level. It has hit $8350.60 today so it will be interesting to see where this finishes by the time US markets close. 

Also remember it is the weekend coming up so Bitcoin can make big moves either direction. 

😉

Been scalp trading over previous weekend - got a few but greed you need to watch the swings and duck when needed!!

Edited by FFS_Daytrader

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@FFS_Daytrader,

Excellent. Agree with your point. I know some Crypto traders that only trade from Friday 9:00 pm UK time to Monday 7:00 am U.K. time.

There are some excellent scalping opportunities over the weekend so we’ll spotted.

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Posted (edited)

Do you think Bitcoin will dip on new Facebook new cryptocurrency (and other) coming on line in the next 12 months?

I think it will - possible back to 5900 support in coming months.

Edited by FFS_Daytrader

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@FFS_Daytrader,

I don’t at this moment in time though depending on how things play out my view could change. 

I think the Facebook Coin will be a positive driver for Bitcoin and actually further endorse the asset class. This could lead Bitcoin to higher prices with the halving event due next year as well.

  • Thought provoking 1

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@FFS_Daytrader,

I am not suggesting Bitcoin could not go down to $5900 or even slightly lower. That is not off the cards at this moment in time. Anyone trading Cryptocurrencies will appreciate the extreme volatility. It is slightly reducing from a few years ago but it is still far more than other asset classes.

You state what you think will happen in the coming months with your 5900 prediction. What do you think will happen in the next 12 months when Facebook launched its crypto?

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The weekend is here and what do you know, Bitcoin, has hit $8746.80.

When Bitcoin is in a bullish phase upwards, the weekend price behaviour simply cannot be ignored. Those who close their trades on Friday and re open on Monday would miss out on a lot of potential gains.

It is up over 3% on Saturday morning at the time of writing this post. 

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Call it 'Gut Instincts' or a feeling based on monitoring price behaviour over the past few years constantly looking for trends and patterns, but I felt that Bitcoin would have a stellar weekend and it just hit $8840.60. It really is trying to surpass that $9000 mark so that it can attempt the $10k mark. 

I feel 'FOMO' could happen as those who felt that they would buy back in at lower prices may get wrong footed. This then creates a further frenzy in Bitcoin prices. 

Slighter longer term Bitcoin has to surpass $11.5k as otherwise technically it is still in a longer term downtrend. 

The weekend trading on Bitcoin and other Cryptocurrencies is an interesting concept. We could see a BUBBLE round two. But do I care if Bitcoin is a bubble or not? Not really. What is important is trading the price action. Now whether you day trade Bitcoin or hold positions longer it does not matter. Even if you mix the two strategies then it can be an effective 'Cocktail Trading Recipe'. You can have a longer term position on Bitcoin but also day trade thus consistently taking profits. It is all about trading the price action in front of us and trading the potential opportunity in front of us.

Acronym by @TrendFollower

I would class Bitcoin as one of the 'Strongest Trending Assets' (STA). 

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Impressive performance from Bitcoin overnight. It hit $9405 which is pretty impressive price action.

What is the price behaviour of Bitcoin telling us? It is demonstrating a strong bullish bias to the upside with large drops / corrections along the way. Of course there will be profit taking when the profits in a short time of space are so significant. It is no different to any other asset in that sense. 

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Bitcoin at 1:30 pm UK time is still holding up above $9k level which is good so far.

It may not last and by tomorrow morning could be back below $9k or shooting up to $10k such is the unpredictability and volatility in Bitcoin. 

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What we may see is a quick sharp push to $10k. This is a very important price level which may attract a lot more capital to the asset class. We know more institutional interest is taking place compared to the run back in 2017 as it climbed towards $20k. We are also know the awareness level of Bitcoin and Cryptocurrencies are higher now than then. We also know there are more active participants in terms of investors and traders now than there were back in 2017.

The large inherent risk still exists with Bitcoin and co so one must be very robust with their risk management. One must also not get too attached to this asset class as the potential still exists for a collapse. It is unlikely at this point in time but a lot of skepticism still exists. One must also be aware of aggressive short sellers now there is a futures market for Bitcoin. 

I still expect Bitcoin to hit $10k pretty shortly even if there is any correction or the big correction may come after $10k is crossed and it hits $11k or even close to $12k. A lot of people will be on the sidelines just watching as the price keeps going up, up and even more up.

On balance of probability it is looking more likely from this current point that Bitcoin will hit $10k and even higher up to $11k - $12k rather than hit zero and collapse in the next 12 months or up until the halving occurs. 

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So here comes the UK 9:00 pm Sunday sell off!

With the gains achieved from Friday evening to Sunday evening it is totally understandable that traders are going to take their profits as there simply is no other asset that has delivered such returns in this very same time period of Friday evening to Sunday evening. 

How deep this profit taking will be I don't know but I think Bitcoin will seeing further buying pressure which will take it to $10k pretty soon. 

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