bitcoin long period of consolidation

[cryptotrader 87]

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 533]

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.

[cryptotrader 87]

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 533]

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.

[TrendFollower 252]

@cryptotrader and @Caseynotes. For me Bitcoin moves on positive news released by the media and goes down on negative news released by the media. 

This news release will determine the next move for Bitcoin in my opinion.

Bitcoin has had a quite a few big (large percentage drops) since its launch so this recent drop from $20k to $6k is not anything new. In fact the lows of Bitcoin after such massive drops is getting higher and higher. It was only around two years ago that Bitcoin was trading below $2000 so today's levels are way up from that. 

Also if Bitcoin went to zero then I think the world would lose confidence in the Cryptocurrency market so to keep it alive it needs Bitcoin to be successful. The market will find a way to not only keep Bitcoin alive but make its price go up. When will be dependant on news flow. If you look back historically at Bitcoin then it has moved on both positive and negative news.

In my view the current consolidation is extremely healthy. Recently new higher lows are being formed so it looks like it is building a strong base and foundation to launch from! ? ☄️

 

[Caseynotes 533]

@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. 

[TrendFollower 252]

@Caseynotes, yes I agree.

[JamesIG 199]

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

[TrendFollower 252]

Thanks @JamesIG. 

I have a 'gut' feeling that Bitcoin is getting ready for another monster move upwards once it has fully consolidated. I think either ETF approval from the US or India's regulation being more positive for Bitcoin could lead to such a move. If both happen then I think $10,000 will be exceeded for sure. It may only be brief but it will be exceeded.

Let's see. 

[elle 75]

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

[TrendFollower 252]

@elle, yes I can see that and yes your suggestion could be possible. 

[jay 2]

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

[jay 2]

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 101]

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...

[PandaFace 94]

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

[TrendFollower 252]

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.

[Mercury 101]

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 533]

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 101]

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 533]

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 101]

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 199]

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 533]

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 533]

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

[Mercury 101]

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?

[cryptotrader 87]

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...

[TrendFollower 252]

@cryptotrader, yes I would agree that at this moment in time Bitcoin is not behaving like a safe haven. I agree with @Mercury that the asset class is far too small compared to precious metals, bonds, etc.

I envisage Bitcoin in the future becoming a digital store of value (Digital Gold). There is a long way to go and many years before this can happen. Cryptocurrency as an asset class along with Bitcoin needs to grow a **** of a lot. This may not happen but is something I envisage could happen in the future.

I have seen such drops in Bitcoin many times now. It is not something that worries me. Yes, Bitcoin could drop to $5000, $3000 or even $1000. It is possible.

It will be interesting to see how Bitcoin reacts should the SEC approve a Bitcoin ETF in the US or say India becomes more positive on Cryptocurrencies. I am still positive on Cryptocurrencies (not all of them by the way), Blockchain the technology behind it which is gathering momentum outside of the Crypto Universe, Tokenisation (Tokenomics) and this whole arena. The junk will fail and go to zero. Absolutely and so it should. Only quality will survive. I do agree with some of the comments by Mercury in a previous post. As an asset class it is peanuts compared to Equities, Bonds, etc so I accept the point that it cannot even attempt to replace Gold as a safe haven now or even in the next couple of years.

[elle 75]

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 

[PandaFace 94]

Absolute carnage today

[Mercury 101]

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?