This will be my last written crypto post until the market chooses a long term direction. I must emphasize again that the long term trends have been broken for the total crypto market cap, as well as the altcoin cap. There's no telling how long we will go without a clear uptrend. This means we can easily test lower levels...or the market can start slowly gaining confidence here. We should really pay attention to what happens with Bitcoin. This is the last possible medium term bullish setup, in my opinion.
This analysis is fairly simple. The cross of the 50w MA (red) over the 100w MA (green) in 2016 resulted in the end of consolidation for Bitcoin. You can see that in the chart on the right. That correction was less severe, but the run up from bottom this year was much more extreme, so a deeper correction makes sense. What's also interesting is that during both bottoming periods, these two moving averages crossed over each other in the opposite direction. On top of that, our current consolidation period (if you can still call it that) has lasted about 6 months so far. The first correction after the 2015 bear market lasted just as long, until the 50w MA crossed over the 100w MA. Overall, the moving averages are looking very similar to the week of May 23, 2016.
Here it is without all my distracting trendlines:
For the upside, if we break out of the downtrend here on high volume, I think we can retest the 13K area, but I'm not sure about breaking it just yet. The market seems to want to take its time in maturing. This involves getting rid of projects that are underserving of their valuations, and I think this period will require a lot of patience. If Bitcoin does break out and retest the June highs, I think the altcoin market may fair better this time, meaning that the total market valuation can reach $500 Billion or above.
The picture will look very different if the cross occurs and fails to produce a breakout. We still have declining volume on the weekly timeframe, which presents the possibility that we are still undergoing re-accumulation. It's very hard to tell, but sentiment at this point is extremely low. The contrarian in me is saying this is the bottom. The monthly Ultimate Oscillator for the total crypto market cap is also at rock bottom, with Bitcoin resting on a fairly important trendline. Bitcoin's UO is also sitting at bottom. A break below these levels would be pretty catastrophic for the market, as it can open the door for a retest of the $1200-1800 zone at some point within the next two years. Some important levels are marked on this chart:
Linked below are a number of my favorite posts to date. I managed to call the bottom in the 3K zone in January AND the top just before 14K in June. I also suggested that growth may be slowing down for cryptocurrencies, even when things still looked more bullish. Some of my other speculative predictions have yet to play out - my $300+ Billion valuation target for the crypto market was reached in June, but I'm not sure if my $500 Billion target will be reached anytime soon. I've made some mistakes, but so far I think I've done fairly well as an analyst in this ridiculous market. We'll see what happens.
That's it from me! We'll have to wait and see if this cross produces a move to the upside, and if it does, I'd want to see us break out of the downtrend channel we've been in since June. That channel is illustrated on my other posts. This is not financial advice! This is meant for education, speculation, and entertainment.
Good luck!
-Victor Cobra
Bình luận
⋅
This bounce just strongly increased the likelihood that this cross will happen within the next week, and potentially produce a powerful move to the upside in the not so distant future.
Bình luận
⋅
The only difference here is that we are below the 9W MA. We need to get back above that first, and there's a ways to go. We're still finding resistance at the previously broken downtrend support level, which is fairly bearish. For 8K+ prices, we need to break back above that. That would be further confirmation that this long correction may be about to end.
Bình luận
⋅
We've officially had our bullish cross on the weekly, but Bitcoin still can't get back above any of the recent downtrends, so I think it's safer to wait to be bullish until that happens. We still have the downtrend channel support (around 6.3K right now) and major support at $5900.
Bình luận
⋅
The problem with this weekly MA cross is that we're not holding either as support right now, so it might end up being a failure. We need to see us get back above as soon as possible, even if we quickly test lower levels.
Bình luận
⋅
The weekly ultimate oscillator is actually at bottom though. So we have conflicting signals. Usually the UO causes a fairly large bounce from this level.
Look at my fav trader latest post, maybe you can find something useful there for your own analysis
vx7777
⋅
@vx7777, I just wanted to share, because you're my second fav trader to watch. While you lack experience being somewhat fresh blood to market, you're developing the skills very quick and your analysis are quite deep. I guess you can learn from Ivan quite a bit.
VictorCobra
⋅
@vx7777, Thanks for sharing. Yeah, I'm still relatively new and not as active of a trader as some. I'm mostly learning through observation, and I enjoy writing about this stuff :) Always willing to learn more.
HouseTarly
⋅
I personally do not think the linear trend is sustainable. Bitcoin is following a logarithmic trend where bubbles form above the trend line. It can probably retest 6k (Hit the logarithmic trend) and even go below that briefly for some time and remain bullish longterm IMO.
I'm also leaning on the side that we're getting close to the bottom, but it may take some time as the cycles have been getting longer.
VictorCobra
⋅
@XZFAN, I agree, which is why I think it's okay that we broke below those trendlines already. I was hoping those trends would break a little later (with valuations higher), but things are fine as long as Bitcoin holds the 200w MA. It may not have to get down there though, and simply test the $6.1-6.3K level.
Yeah, I agree. Personally don't think we'll drop below 5k, but we'll just have to see in the coming months!
HouseTarly
⋅
@XZFAN, Here's a good video and the best data point we have for longterm growth. Please consider that this trend has been during an everything bubble post the 08 crash.
@XZFAN, Thanks for sharing. I still like to use linear trends on the log chart because they've been really helpful in the past (particularly with calling the June top). We've also seen linear trends hold on the log scale in the stock market hold for over 100 years. The regression curve is helpful when dealing with a declining growth rate though. New linear trends may be formed along the way.