Since $3600 the trend line has still remained in tact. The recent pullback though abrupt showed signs of buyers coming in much more quickly then the previous pullback. This is evident from the wick on the 4 hour chart. Bottom line, buyers are looking to buy on any dip period! Unless you were sitting at your computer and ready to hit buy, you had a few minutes to get in at $14,000. Even the first pullback was bought up extremely faster than the last one. This is hardly the sign of a bear market, but as we know sentiment can change on a dime and often does when we least expect it.
The comparison of the two corrections is very similar. In September the trend changed and we formed a new trend line. Obviously at that time we could not have known that, but as we obtain more data the trend became clear. Currently that trend is still in tact. It has been tested but any test has been bought up quickly. So bottom line as much as I want an $11,000 correction to happen, and though it still can happen, I do not see any evidence to support it. You can do technical analysis to the cows come home, but sometimes the most simple things, like trend lines, are the best guides for positioning. I can show you fibb retracements, EW wave counts, ABCDE wedges, triangles, that all show us going lower, but these are assumptions. This is why corrections are difficult to trade and Elliott Wave is not a crystal ball but a guide. What did we base our assumption on? The prevailing trend. Now this is completely different from Septembers correction where we never reverted back to the prevailing trend line. We started a new trend line and from that point it is still in tact.
So why did I enter so early after the correction when normally I am a tight trader and conservative investor? Simple buyers bought the dip quickly pushing us back into the previous consolidation channel. I was willing to buy a 1/3 position at $14,740 as the previous dips at the trend line were short lived (see below) . My stop loss zone would be below the trend line which is a now lower than my entry level. Trend lines often become resistance after breaking support so I believe it was a low risk entry as I would have opportunity to exit with minimal loss and still be up overall. Playing with house money so to speak.
Regardless of the the numerous TA's calling for 11k or as low as 5k. Please show me some evidence more than an assumptive pattern and a call that we have come to far to fast? I'm not saying we won't correct, so do not get me wrong, but where is the evidence we will? I will provide my evidence for a bullish continuation. #1 - Prevailing trend has NOT been broken. #2 - All dips into the trend line see buyers rush in #3 - NOT one 4 hour bar closed below the trend line #4 - We made a HIGHER HIGH and an HIGHER LOW #5 - We are CONSOLIDATING at where we would expect for another run.
Now the Bear evidence #1 - We NEED to break the trend line where support become resistance (assumptive till it happens) #2 -
Now sure someone can throw up and EW count, Fibb retracements, Wedges, Triangles etc, and provide a bearish pattern that may or may not develop, but I can do the same for a bullish pattern as well. This is why I will say it again, corrections are difficult to trade!
Bottom line, many times TA's over analyze charts, and fail to look at the most important thing. THE TREND! Until that trend line is broken I am bullish. I'm looking to add to the position out of the two consolidation boxes shown.
Komen
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Komen
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As we approach the trend line which Ironically is where a H&S is formed, and is also the 0.618 retracement, and is at the bottom of the channel I have looked at levels to prepare for a down turn if it happens. In my opinion it is a coin flip, but on all 4 time charts we did not see the same buyers jump in, so the bears are gaining control it seems. But as I said sentiment can change on a dime.
Komen
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The futures contract is slightly into backwardation which bearish.
Komen
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To disclose I'm out @ $14350 on the 1/3 position added yesterday at $14729. It could reverse right here and I can always re-enter. Lets see where it lands
@goldbug1, You called the market euphoric yourself. Take a look at the cryptomarket cap and compare it to the stages of a bubble. Then, realize that BTC is leading the bubble and now entering "fear", the market cap and alts are in there own bubble but will follow BTC.
To note, if this were really a bubble - 90% of people wouldn't believe it. Hence, the strategic "return to normal" that got you to buy back in even though you said you were out to 18k...
Think outside the box, don't get dismissive when someone opposes you. (Great sign we're in a bubble).
Thank me later.
goldbug1
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@bigdogg, Opposing and providing something other than "I think we are in a bubble" is two different things. We do not care how you feel, you bring nothing to the table. good luck on your short, this will be interesting!
tnguta
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@bigdogg, Please provide some technical analysis..
bigdogg
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@tnguta, The image below posted by @chwi03 is excellent. Proper TA doesn't exact work because it's a bubble. You can't have it looking like it's going down... Everyone would cash out too fast, which is why it keeps going down but continues bouncing back up just enough to give TA people hope and keep people in the game. Like goldbug got caught here!
Shockinalive
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I commented before and said that if you zoom out, you would know that it isn't close to going upward for a while. Also calling it 'evidence' isn't correct, a TA isn't evidence it is a tool to measure patterns and identify trends and make predictions. It's good to call a long position, but I find it even better if you can determine short positions :). Anyway, this is still crypto and anything can change any moment and that's the hardest part of it. I'm still glad that you posted your ideas and analysis, doesn't matter if you're right or wrong. Thanks :)
maryaamerica
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Agree or disagree either way, I always appreciate your analysis and hearing what you have to say Goldbug so please don't let one or two rude people discourage you - keep it coming!
chwi03
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I made this comment on @MarcPMarkets post this morning looking for ideas/feedback. I wasn't going to post elsewhere, but I saw a clear question in your post "show me evidence" that could point to a broader bearish trend.
I don't know if you could call this evidence, but it is clearly data that would potentially allow for a bearish trend.
I'm sure you've seen the "Lifecycle of a Bubble" chart. For the short term, I'm bearish, but even for the long term I have changed from bullish to neutral on Bitcoin. I would love people's thoughts on this:
Looking at the top 50 coins -
* December 10, BTC had 63% of a $390 mil market, with BTC market cap of $233 mil
* Jan 9, BTC has 37% of a $678 mil market, with BTC market cap of $249 mil
To lose 26% market share in only one month is actually pretty astounding. .... $300 million poured into market in the last month, and BTC is still trading at the SAME PRICE as a month ago. -- as I interpret it, this means that only 5% of new money was put into BTC in the last month, with 95% used to purchase other cryptocurrencies!
Now, I can see one of two things happening:
* BTC bulls take over SOON, driving BTC to past the 17k-18k area, causing a bunch of the money in the altcoin market to rotate back to BTC. Let's say this happens and BTC can retake 50% of market share... 50% of $678 mil total market would be a new $339 mil market cap for BTC, an increase of about 50% from current, for a new high of around $22,500. From there, the bulls can keep control and drive it higher.
* BTC bears keep control, and BTC follows additional correction patterns down to 12K, or simply keeps trading in the 12K-16k range for another few weeks. In this scenario, new money will keep coming into the market -- but new money will heavily go into altcoins vs BTC, driving BTC's overall share even lower.... let's say BTC market share can drop to 20% of a $800 mil market (among the top 50 coins). ... This would give BTC a new market cap of only $160 million and a trading price of about $9,600.
NOW, let's say the second option happens... if $650 million is in "coins other than BTC" then BTC will almost definitely lose #1 position to Ethereum, and possibly drop even further down the list of coins to #3, #4, #5...
And, people will realize that even with Bitcoin's incredible year last year, that AMONG THE TOP 40 COINS LAST YEAR, BITCOIN'S RETURNS WERE #21 ON THE LIST!. And, Bitcoin will become like "Myspace vs Facebook" and will cement it's trading along the "new normal" price of about $4,000 (depicted in the "Lifecycle of a Bubble" chart) and slowly rising from there as the overall market grows.
bigdogg
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@chwi03, I agree! I have the total marketcap returning to 100-200 million.
BTC will lead the downtrend though. It's dominance will actually rise substantially during the crash as people realize they have been played with these "shitcoins" ADA, XLM, EOS, XRP, XVG, TRX and XRB. Notice the similarities of these shitcoins that have been pumping X's in the name, high supply, mostly just whitepapers, and cheap dollar value.
To note, if this were really a bubble - 90% of people wouldn't believe it. Hence, the strategic "return to normal" that got you to buy back in even though you said you were out to 18k...
Think outside the box, don't get dismissive when someone opposes you. (Great sign we're in a bubble).
Thank me later.