bitcoin long period of consolidation

[trade247]

What are we saying folks? Are there areas or prices which you're looking at for a move either way after bitcoins recent consolidation period? They say it's a time to accumulate when there is consolidation. Could now be the time to buy bitcoin? I think I'd be adding to my position in physical but would be cautious of anything else. Leveraged for example right now could get painful ....

 

[Caseynotes]

Consolidation can lead to a period of distribution or accumulation, the descending trendline remains the dominant feature on the chart. But also of note is the continued tapering off of volume. The series of higher lows since June is interesting but no one seems ready to make the big play just yet.

Daily chart with vol.

[trade247]

also true - however the trend is only a trend until it's not.

NowI know that sounds stupid, but how does one figure out chances of reversal when it comes to technical?

 

[Caseynotes]

That's true and levels are there to be broken be they horizontal or oblique. A strong break should be accompanied by strong volume.

Normally there is also the likelihood that there will be an attempt to retest the level, that might be just a tail on a lager time frame bar or a weak pullback on the smaller time frames IF this were a normal type asset but bitcoin often makes it's own rules. With bitcoin we are use to seeing powerful 'pumps' where the buying or selling is just relentless, this is due to the stranglehold of a comparative few holding most of the bitcoin and are able to take control of the whole market if even just for a short while.

[Caseynotes]

@cryptotrader & @TrendFollower, bitcoin definitely has a strong support zone and the descending trendline is very strong as well, which will be the dominant feature remains to be seen. There is the possibility that price will not spark and race off in either direction though as the triangle comes to an end, it may well limp on sideways til, as you say, there is some new news. 

[JamesIG]

Article may be of interest for some. Bitcoin triangle could provide strong buying opportunity

[phillo]

If you guys "gut feelings or whatever are right about a move up in price, my opinion is a quick spike down ( stop run ) to suck up enough liquidity to then push it higher ( we'll see)  Chart below suggests some levels

[Guest jay]

I'd give it 80% probability of a downside breakout of support around $5600-5800.. BTC heading for $500. I would prefer an upside breakout- would mean a new large bull cycle but the charts and topped out global stock markets suggest a downside a move

[Guest jay]

The only fundamental news that would support a new BTC bull phase would be if indeed it was seen as a portfolio diversifier. I doubt it- too risky and too small an asset class for people to gravitate to once the great equity bear strikes

[Mercury]

I agree with @jay FWIW.  I see only long term downside as this iteration of crypto dies to be reborn as something more sustainable.  You never want to be a first mover in tech, unless you get in early and exit after the catch up rush, but that has already happened...

[Guest PandaFace]

Interesting that you include a link between equities and bitcoin when in my eyes the two are in no way linked? 

[Mercury]

It will be interesting to watch what happens in the scenario you paint @TrendFollower but I wouldn't trade it myself.  I think the short term movements around things like the Trump election, Brexit vote and trade war rhetoric is too short term to draw any conclusions about safe havens.  We haven't really had a major bear move yet that would spark serious worry, not since cryptos came to the fore.  If you look at precious metals over the long term you will not necessarily see a clear correlation to stocks.  Metals all ran up in the great commodity bubble to the 2011 peak and then dropped again until the 2016 turn but that does not map nicely to stocks for instance.  Bitcoin only got going into its bubble in 2017 and has been spectacular (both ways!).  But the technicals suggest a stronger case for Bitcoin to fall further whereas for precious metals it is more balances with, in my view, a higher probability of precious metal strength.

It would be interesting to know the total asset class value of Cryptos vs Bond, Stocks and of course FX.  If Cryptos are to become a safe haven then that must be the case for more than just a few early adopters.  Surely in this case Bitcoins would attain levels way, way above 10000 and even the 20000 high?  I have seen some outlandish valuations in the past around this topic.  100,000+

But for Cryptos to actual work they must become money.  This kind of valuation level means it will never become money.  So it is self defeating.  This is often the case, in my experience, with new tech.  The dream is not fully thought through, too idealistic.  We saw that during the first dotcom bubble.  Out of the ashes of the crash and burn comes a more mature and sensible approach (Google for example rather than AOL...).  It is a perpetual cycle because human nature is what it is.  This is why I am almost 100% sure Cryptos will fail this time.  And next time I expect the technology to be used by governments to effect their long held desire to eliminate paper money...

[Caseynotes]

I was looking at Bitcoin this morning as we are heading into the descending trendline, looks to be backing away while the volume continues to drop off. Looking increasingly likely we will see price continue sideways without any fizz

Daily chart;

[Mercury]

Saw the same @Caseynotes the trade, if you want it, will be on a firm breakout of this Triangle consolidation.  It is getting very near the end now, which makes it troubling as received wisdom in charting circles is the breakout should occur before roughly 2/3 of the Triangle is travelled.  The closer the market gets to the end the less reliable the formation is.  So Bitcoin, who knows?

Trading is as much about the potential points on offer as anything else.  I would not be interested in a downside move, there are way better Bear scenarios about.  Also what happens to a trade if Bitcoin collapses?  Does it pay out?  So the only interesting trade is a rally out of the Triangle in the scenario that @TrendFollower has painted.  Whether this would be as a safe haven or pure speculation who knows...  Too many who knows for my taste.

[Caseynotes]

Bitcoin has settled down so much recently @Mercury and the days of the super rallies are over for now but the 'pump and dumpers' can still rattle the nerves. Plenty of potential points to the downside as many have pointed out and envisage bitcoin back into the hundreds.. Personally I only follow it for the fun of the thing.

[Mercury]

Agree @Caseynotes but even if it goes into the 1000s that, what 4000ish points with very high margins and volatility.  there are way more points on offer on stock indices if we get a bear and on a USD rally.  Even EURGBP is set to offer 3-4K with much lower margins and more manageable volatility.

[JamesIG]

We actually covered cryptocurrencies in a recent FT / investors chronicle podcast which you can check out here. 

https://www.investorschronicle.co.uk/sponsored/2018/10/09/paid-post-cryptos-further-to-fall-or-time-for-a-bounce/ 

[Caseynotes]

Very interesting podcast not least for one of the questions put to the experts by IG concerning the many who are sitting on big losses and the affect that might have on a future bull or bear move. ?

[Caseynotes]

Bitcoin made an interesting long drop to support in sympathy with the indices, much belated though in a single 2am 1 hour pump.

[Mercury]

Impossible to draw any conclusion with one move of course but surely not a safe haven?  That said Gold/Silver didn't jump, well has now but not during.  Most other currencies are holding up well vs USD but not bitcoin.  So is bitcoin a value store (replacing Gold etc) or a currency or something?

[trade247]

On ‎09‎/‎10‎/‎2018 at 19:52, TrendFollower said:

If there is a bear market in equities around the world then capital could shift to Bitcoin. When I was monitoring Bitcoin's behaviour compared to Gold during the Trump and North Korea rhetorical warfare during those instances Bitcoin 'trumped' Gold. The same during the Middle East / Syrian issues, build up to Brexit referendum, etc. 

During a bear market which may already be in motion (in terms of starting) the riskiest assets will get hammered. To offer a balanced view, they do not come much riskier than Bitcoin. Therefore one would assume it will get absolutely annihilated. It may well go down to $5000 or even $2000 - $3000 but I cannot see lower than that. If it behaves like a safe haven during such times then it could easily surpass $10000. 

I have an open mind so lets see what happens. I am very intrigued with the price action of Bitcoin especially if there is a bear market in equities.

I would say the recent action negates this point? The correlation co-efficiency is just not there...

[phillo]

On ‎06‎/‎10‎/‎2018 at 15:39, elle said:

If you guys "gut feelings or whatever are right about a move up in price, my opinion is a quick spike down ( stop run ) to suck up enough liquidity to then push it higher ( we'll see)  Chart below suggests some levels

chart update 

[Guest PandaFace]

Absolute carnage today

[Mercury]

Looks like the breakout of the extended consolidation Triangle is down then.  Is this the end for Cryptos, at least in the current guise?  Is it a precursor of a cascade across most assets classes with Stocks also under pressure?

[Mercury]

Bitcoin et al continue to drop with no end in sight.  It is a mania not a bubble.  Who will buy bitcoins if they hit the Death zone?  Everyone who is pro bitcoin is in and will be seriously under water...

[Mercury]

I don't trade Crypto period!  I consider that you have to trade what you are comfortable with.  I have been watching and waiting for the biggest shorting opportunity any of us are likely to see and have Shorted that.  It is about keeping your power dry for the right opportunity.  Crypto is a Mania, I wouldn't touch it with a barge pole, neither Long nor Short, but that's just me.

[Caseynotes]

No, you are wrong there, the bitcoin bubble, rise and fall was easily the best long then short since markets were ever organised engulfing the previous champion 'the Tulip bubble' by a long way.

So the 'biggest shorting opportunity any of us are likely to see' has already been and gone while you are still waiting.

I'm sure you haven't forgotten we already had a whole year of this 'end of days' big short coming stuff all through 2016 only to see price break out of a long period of consolidation to the up side and into a year long bull run.

 

 

 

Edited December 16, 2018 by Caseynotes

[Mercury]

Oh dear!  So it all going to happen again and stock will run hot again eh?  But thanks for proving me right there that Bitcoin is the biggest Mania of them all.  Nuff Zed...

[Mercury]

@TrendFollower what do you trade?

[Mercury]

And when did you short Bitcoin, what level?