I could quote 100 quotes from investing legends, but the most important quote there is to have posted above your desk is "Do Not Time Trend Changes". Now many are new to trading and fail to understand there are different trend cycles. Short term, Mid term, and Long term. It's important as an Investor to understand where you are in each.
BTC: LONG TERM - BULLISH MID TERM - BULLISH SHORT TERM - BULLISH
So I am bewildered by all the short on Bitcoin', and with alt-coins all I see is LONG AND LONGER! Let's quickly get back to reality folks! Other than a handful of coins, few have continued the bullish trend Bitcoin' has since last January, most have corrected numerous times and where we expected. Will some continue higher? Sure, but you are gambling now at these levels.
Clearly 4 was at a pivotal point on the BTC' wave count where the correction pattern changed from a 333 corrective patterns to "V" corrective patterns . Did anyone see this? Perhaps but show me a post on TV detailing the change (NOBODY).
With the bullish run in alts we are seeing LONG alts and Short bitcoin posts! Seriously? Honestly alts have had a good run and though they could easily go higher, especially with all the new money flowing in, I think we get a slight pullback so lets break it down rationally.
1) New money is flowing into the market quickly so anything is possible (must keep that in mind) 2) New money may flow into alts that had a run, but new money in late, often exits quick on any sign of a pullback (BE CAREFUL) 3) Pullbacks will be bought up quickly, and as we have shaved a little off of our winners we will be looking for OPPORTUNITY to cost average. We are not trying to force trades here. To dangerous and the risk well out weighs gains. In addition we are long term, let the market determine direction, we just need to be prepared for the opportunities as they present themselves. 4) Cash is King in corrections, you sell into strength and buy into weakness. 5) Bitcoin' is still the king. As we shave off we are putting it into BTC' and USD' and it appears that others are doing the same. This is a critical sign, as this often leads to a market rotation, at least that has been the previous trends. 6) Bitcoin' has quickly been bought up on every correction since wave 4 on our chart. Bet against all three trend cycles and see how you come out in the long run. I expect any pullback here will be quickly bought with a target of $21,000+-. 7) I scroll daily through the charts to gauge market sentiment and the first few pages are LONG everything except Bitcoin' except one TA' that had a short on XRP' with the statement "you missed the train" ;) 8) Coinbase still has limited offerings. Most of the money flowing in will likely stay there, for now. 9) IMO' early speculators are the reason for the recent alt run up, but they bought BEFORE these levels. Your late to the show. 10) Alt coins have started to pause, now this could lead to consolidation before a leg higher, but most have hit their target levels in the short and mid term, so the PROBABILITY of a pullback is better than 50%.
Game Changers
1) The futures contracts are in backwardation at this point, and it would not surprise me to see a selloff in Bitcoin' as we approach 6pm today I'm ready to buy the pullback. I will be watching closely. 2) This money may not go to Cash but to ETH' and LTC' which could also see a bump 3) Tonight and mainly tomorrow the news will be heavily BITCOIN' as the CME' group launches XBT/futures contracts. 4) TDAmeritrade enters the game this week.
Bottom line Nobody knows what will happen and it is 50/50 at best concerning alts. So I will side on the side of caution unless there is a logical reason to trade. I will be looking for OPPORTUNITIES to buy! Patience leads to opportunities. Bitcoin' may get interesting later today before the market opens. With the spread 10%+ it will be interesting to see how the market reacts! maybe too few contracts at this point.
What worries me is that we are getting to a point where people are starting to think that BTC is invincible and there won't be any correction. Is this really possible?
In case someone hasn't noticed, when BTC broke above $18000, it actually broke upwards from a rising wedge which is supposed to be a reversal pattern. So BTC is not following any rules. This has been an extremely long rally without any sort of correction. I feel people are starting to become too comfortable and this is when we are most vulnerable as the bears could strike at any time but I am not sure when that would happen. I feel without any major bad news, this rally will not end.
Kub0Lo
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Well I'm hoping for Xmas discount
DanDate
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@Kub0Lo, if anything the price should moon closer to end dec as businesses dump their money into it to defer income tax
fificlub
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@nginx, "... BTC is not following any rules", because there's much more to it than buying reg. stocks.
TAneophyte
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@fificlub, that 'much more' has mainly to do with the tethers. There no TA needed for BTC especially since November (sorry TA purists), just follow the tether trail and make your trade. When tethers are printed it'll either rebound and consolidate after a short drop or pump thereafter.
fificlub
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@TAneophyte, Weren't tethers taken care of on bitfinex ? ASAIK Bitfinex was cut off of banking for doing that (if still isn't)? Solution not allowing orders over a certain amount to be removed til some time passes ? And hey one more questions are there any charts made by tethers on tradingview ? Point me to some pls, thanks.
Interesting post. As someone who's only got 30% of his portfolio in BTC, I look closely at at least 10/15 alts every day. I agree that most high cap alts have topped already - LTC, XRP, ADA and IOTA, mainly. However, some lower cap seem ready to pump right now - OMG and WAVES mostly. And BCH has been consolidating for a while. So I think we might be seeing one more round of alts pumping between Monday and Tuesday. Till then, 100M Tethers say BTC will break 20k.
goldbug1
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@Domtranslator, seems to be still pumping, amazing how young markets can stay overbought or oversold longer than we can stay patient or liquid!
In case someone hasn't noticed, when BTC broke above $18000, it actually broke upwards from a rising wedge which is supposed to be a reversal pattern. So BTC is not following any rules. This has been an extremely long rally without any sort of correction. I feel people are starting to become too comfortable and this is when we are most vulnerable as the bears could strike at any time but I am not sure when that would happen. I feel without any major bad news, this rally will not end.