If you have seen my updated idea on BTC yesterday, I have warned you before BTC dropped below $8800.
If you think that the dip is over, let me tell you it is very likely that another dip is coming. From my very first post on TA, I have always expected BTC to drop back to at least to $8000 so a new bull run can begin. The whales certainly played it out nicely and fooled most of traders. In fact, when BTC went above the top of downtrend channel , many of us thought the nightmare was over and a new bull run has begun. However, the downtrend channel was only broken on the linear scale. On the log scale the downtrend channel has never been broken. In fact, when BTC touches the top of the downtrend channel on the log scale, it quickly got rejected, forming a double top and BTC was reversed in no time.
So what is going to happen next? BTC is at this exact moment trying to get back above the downtrend channel (linear scale). You might ask why I used the linear scale when the log scale seems to be more accurate? Well, this is something I learnt from other traders recently, log scale works better in a larger time frame whereas linear scale works better in a shorter time frame. In fact, if you look closely at the downtrend channel on a linear scale, you can see there is a huge sell wall stopping the bulls. On many occasions when bulls finally pushed BTC above the top downtrend channel , it got hammered back below the downtrend channel straight away.
By looking at MACD the bulls are losing momentum. And the bear flag is becoming more obvious. With the FUD on SEC, Binance hack & Mt Gox, I doubt the bulls have the strength to win over bears.
Also, note the similarities between now and 2 Feb - 6 Feb. Be prepared for the worst.
This is not a financial advice, please trade cautiously.
Well done! And finally someone who uses bitcoin related events in TA instead of only looking at the indicators. You are probably very right about the fact that the Binance "hack" and Mt Gox have a huge influence in bulls not breaking out. That said, the drop to 8.3 or so yesterday and the run up to 9.5 is just only a recovery. Smart people bought the dip, dumb people bought back in at 9k. And since we didn't break 11.8k why would we suddenly break 9.5k? Trust is gone and market makers need to push it above 13k for dumb money to enter again.
Taiwan_Bear
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@severt, Normally I only rely on TA but the effect of Binance hack and Mt Gox was destructive. And indeed you are very right that the recovery was only for the bears to dump a second time.
MinoAcc
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Many thanks, sounds reasonable. Future will show, but I will bookmark your idea, like the way you`re thinking.
Taiwan_Bear
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@MinoAcc, Thanks for the kind reply. I am learning new things every day and I am more than happy to share my idea and knowledge so we can all learn something from each other.