HISTORY DOESN'T REPEAT ITSELF, HOWEVER THEY ARE OFTEN ALIKE.
A famous sentence with which I'd like to start this analysis. My first one after a long time on TradingView, my first one of hopefully many analyzing crypto, forex and equity markets.
What have we seen on Bitcoin? We've seen a huge breakdown of the floor in November, after that a few rallies upwards to $4,400 and currently sideways notion of the market. The total market is back again in discussion whether we're bull or bear. Let me phrase it that way: We're not bull. Didn't break any downtrend yet on Ethereum and Bitcoin and therefore it's not the time to state that we're in a bullmarket. Personally we could state that we're in upwards corrections in a downwards trending market. That's quite likely.
So, could we state that we're close to the bottom? Yes, that's quite likely to say percentage wise. Currently we're around 70% down since the top, if we drop another 10-20% (so to $2,800 or so) that's not the biggest drop since the top, but could be the most painful one. Especially given that the fundamentals are getting better and people will probably not understand why the price would drop again, also given the extreme bullish sentiment on Twitter lately.
What would be the best way to do so if I were a whale? Well, I'd give people some bullish hype with some breakouts on altcoins (which we've seen lately, majority of these pumps retraced all the way back to the previous level), let them buy altcoins on BTC pairs only, then crash BTC to destroy all the potential profits from everyone. When BTC is done dropping and goes in sideways notion, then we'll pop an altseason in the summer of '18 to accumulate more BTC, after which we'll be starting the uptrend rally during the end of 2019/beginning 2020 (just before the halving) and just recycle the whole cycle from 2014-2018 over again. However, this time it feels like that the market is taking more time -> Maturity of the market?
If we check some comparisons with the 2014 markets and how to connect them with the current market environments, things are quite alike.
- Also in 2014 we broke support + we've had a sort of double top pattern with a HUGE rejection candle and weekly close (we've had that 3 weeks ago with a hard rejection, no this was not profit taking, this was a bearish rejection).
- In 2014 we've also had the small bullish divergences causing the upwards corrections, which we've also had here to $4,400.
- In 2014 we also couldn't break the downtrending line, while we created a small HL. We didn't create any HH overall and we didn't create a HH now too.
Given that the whole narrative has shifted from '$6,000 is the bottom' towards '200MA is the bottom' I'm feeling that we have to crack another floor before we actually find the bottom, while nobody believes in BTC anymore.
What am I watching at this point?
- Overall we see major rising wedges in the market and as discussed: a hard rejection 3 weeks ago on the market which can't be qualified as bullish in general.
- Weaker volume in the upwards trending market we've had in the past weeks, which is going to lead to a breakout of volume too. Black Swan event?
- In 2014 the market retraced towards the 0.886 fib level and closed around that area (this was the $192 level back then). Yes, we had a capitulation wick, but the close was around that fib level. In 2019 this would lead to a final closing drop around $2,300. Doesn't seem unlikely, as there's also a big block around that area between $1,800-2,500.
- If we do that, this would create the big bullish divergences on the 4D+ timeframes too and that always marks the bottom. Check out my Twitter -> the 2000 Dot.Com crisis bottom, 2015 Bitcoin bottom and the 2008 Crisis bottom were all marked by this.
- If we use the fibonacci extension on the upwards corrective waves now, we could also see that the 1.618 fib level is around $2,300, which also aligns with the bias obviously.
- In upwards trending markets, we also use ABC corrective waves to describe corrections from the previous trending wave. As we're seeing a downwards trending market now, I'm quite sure that we've finished the ABC corrective wave to the upwards, as we couldn't crack the 0.618 fibonacci level of this wave in general and therefore need to make another impulse wave in the general direction of the market -> downwards.
If we use some more arguments, we can also see the following things at this moment surpreme:
- Weekly RSI on Bitcoin is back again at it's resistance level (the support it was on before the major crash happened)
- Weekly 20MA is coming in play and has acted as resistance. With the weak upwards movements from the past weeks, I'd say we're still seeing that as resistance.
- Weekly Stoch RSI on Ethereum and Bitcoin are on it's highest point since October '17, which in general is not a sign for super bullishness on the market.
- All majors (EOS and ETH) are rejected heavily at their previous support and confirmed that as resistance + are in a rising wedge.
- The fear & greed index is back at very high levels. Last time we've had that level was 14 November (and on every other peak of the price in the past year).
Ethereum specific:
- Ethereum Longs are at all time high.
- Ethereum Shorts are at all time low.
- So the ratio is at all time high too.
Remember: April '18 shorts on Bitcoin were at an all time high -> We had a break upwards of the price from $6,000 to $7,500 within a few hours due to a short squeeze. Also remember: December 6th of 2018 we had Ethereum shorts at an all time high -> ended up with a break upwards from $80 towards $157 in just a matter of a week due to a short squeeze. This also doesn't make me bullish.
So, what am I expecting? I'm expecting a final shakeout on the market, which is probably going to land around $2,300 and close there + move sideways between $2,300-3,200 for the rest of the year, before visiting the major trendline it started back in 2013 and then we're finally visiting the downtrending trendlines.
After that we're starting the biggest epic bullmarket of our lifetime in 2020-2024 on Bitcoin, as I'm expecting crypto's in the end to rally, after the equities markets are going to retrace.
A famous sentence with which I'd like to start this analysis. My first one after a long time on TradingView, my first one of hopefully many analyzing crypto, forex and equity markets.
What have we seen on Bitcoin? We've seen a huge breakdown of the floor in November, after that a few rallies upwards to $4,400 and currently sideways notion of the market. The total market is back again in discussion whether we're bull or bear. Let me phrase it that way: We're not bull. Didn't break any downtrend yet on Ethereum and Bitcoin and therefore it's not the time to state that we're in a bullmarket. Personally we could state that we're in upwards corrections in a downwards trending market. That's quite likely.
So, could we state that we're close to the bottom? Yes, that's quite likely to say percentage wise. Currently we're around 70% down since the top, if we drop another 10-20% (so to $2,800 or so) that's not the biggest drop since the top, but could be the most painful one. Especially given that the fundamentals are getting better and people will probably not understand why the price would drop again, also given the extreme bullish sentiment on Twitter lately.
What would be the best way to do so if I were a whale? Well, I'd give people some bullish hype with some breakouts on altcoins (which we've seen lately, majority of these pumps retraced all the way back to the previous level), let them buy altcoins on BTC pairs only, then crash BTC to destroy all the potential profits from everyone. When BTC is done dropping and goes in sideways notion, then we'll pop an altseason in the summer of '18 to accumulate more BTC, after which we'll be starting the uptrend rally during the end of 2019/beginning 2020 (just before the halving) and just recycle the whole cycle from 2014-2018 over again. However, this time it feels like that the market is taking more time -> Maturity of the market?
If we check some comparisons with the 2014 markets and how to connect them with the current market environments, things are quite alike.
- Also in 2014 we broke support + we've had a sort of double top pattern with a HUGE rejection candle and weekly close (we've had that 3 weeks ago with a hard rejection, no this was not profit taking, this was a bearish rejection).
- In 2014 we've also had the small bullish divergences causing the upwards corrections, which we've also had here to $4,400.
- In 2014 we also couldn't break the downtrending line, while we created a small HL. We didn't create any HH overall and we didn't create a HH now too.
Given that the whole narrative has shifted from '$6,000 is the bottom' towards '200MA is the bottom' I'm feeling that we have to crack another floor before we actually find the bottom, while nobody believes in BTC anymore.
What am I watching at this point?
- Overall we see major rising wedges in the market and as discussed: a hard rejection 3 weeks ago on the market which can't be qualified as bullish in general.
- Weaker volume in the upwards trending market we've had in the past weeks, which is going to lead to a breakout of volume too. Black Swan event?
- In 2014 the market retraced towards the 0.886 fib level and closed around that area (this was the $192 level back then). Yes, we had a capitulation wick, but the close was around that fib level. In 2019 this would lead to a final closing drop around $2,300. Doesn't seem unlikely, as there's also a big block around that area between $1,800-2,500.
- If we do that, this would create the big bullish divergences on the 4D+ timeframes too and that always marks the bottom. Check out my Twitter -> the 2000 Dot.Com crisis bottom, 2015 Bitcoin bottom and the 2008 Crisis bottom were all marked by this.
- If we use the fibonacci extension on the upwards corrective waves now, we could also see that the 1.618 fib level is around $2,300, which also aligns with the bias obviously.
- In upwards trending markets, we also use ABC corrective waves to describe corrections from the previous trending wave. As we're seeing a downwards trending market now, I'm quite sure that we've finished the ABC corrective wave to the upwards, as we couldn't crack the 0.618 fibonacci level of this wave in general and therefore need to make another impulse wave in the general direction of the market -> downwards.
If we use some more arguments, we can also see the following things at this moment surpreme:
- Weekly RSI on Bitcoin is back again at it's resistance level (the support it was on before the major crash happened)
- Weekly 20MA is coming in play and has acted as resistance. With the weak upwards movements from the past weeks, I'd say we're still seeing that as resistance.
- Weekly Stoch RSI on Ethereum and Bitcoin are on it's highest point since October '17, which in general is not a sign for super bullishness on the market.
- All majors (EOS and ETH) are rejected heavily at their previous support and confirmed that as resistance + are in a rising wedge.
- The fear & greed index is back at very high levels. Last time we've had that level was 14 November (and on every other peak of the price in the past year).
Ethereum specific:
- Ethereum Longs are at all time high.
- Ethereum Shorts are at all time low.
- So the ratio is at all time high too.
Remember: April '18 shorts on Bitcoin were at an all time high -> We had a break upwards of the price from $6,000 to $7,500 within a few hours due to a short squeeze. Also remember: December 6th of 2018 we had Ethereum shorts at an all time high -> ended up with a break upwards from $80 towards $157 in just a matter of a week due to a short squeeze. This also doesn't make me bullish.
So, what am I expecting? I'm expecting a final shakeout on the market, which is probably going to land around $2,300 and close there + move sideways between $2,300-3,200 for the rest of the year, before visiting the major trendline it started back in 2013 and then we're finally visiting the downtrending trendlines.
After that we're starting the biggest epic bullmarket of our lifetime in 2020-2024 on Bitcoin, as I'm expecting crypto's in the end to rally, after the equities markets are going to retrace.