To be clear this is a Technical Analysis for those that are still not straight on the difference between TA' (Technical Analysis) and FA' (fundamental analysis).
Elliott Wave is not as cut and dry as many people think. Give a chart to three different analysts they will likely give you similar overall pictures, but in the short term it becomes hazy to say the least. Other than the trend and market sentiment, Elliott Wave is used to gain an overall aspect on what phase of the market we are in and Fibonacci provides a guide for levels of interest.
This morning we hit a critical level in my opinion. Now to be fair I did not believe we completed wave III' in the longer term cycle, but I yet I never remove it from the possibilities. It is all about probabilities which is why I personally add in positions seldom going all in, and never all in during a correction. The other side of the coin is that markets reverse faster than we often can adjust and we end up chasing reversals which leads to portfolio erosion. So trying to sell your core long term holdings is foolish in my opinion. Being out of the S&P during the best 25 days over a 40 year span reduces your returns by half. Sure you could say well if your out the 25 worst days you gains almost double. The trick is 70% of the best days are within one week of the worst days, so good luck.
Now to be clear we can still go lower, However, at this point we have pulled back near to the 7582 level (0.618 level of the bull run that started in 2015) which in my opinion completes the IV' wave and sets us up for the final wave. I want to again emphasize again that we can go lower and a if we break and close below 7582 lower levels as low as 3000-4600 come into play. I just do not see it but again I did not see breaking 9000 either so nothing is off the table. With that said 9000 saw buyers come into the market and I believe it is short lived. So in my personal opinion its just best to buy dips! If you never sold an equity thinking it would go lower, yet it turned and went higher, leaving you buying higher than you sold, you have not been trading very long and you will learn your lesson eventually. I know there are many paper traders that do this consistently but I have yet to meet a real one that wasn't a liar.
Bitcoin' more often then not rallies over the weekend. So as I enter another partial position here I look for the 15000 (0.618 retracement of the correction) to 17300 levels for my initial target. As we sold into strength we are now buying into weakness.
Bottom Line: This is still a bull market and corrections happen. Trading corrections is risky, so I look to position myself when the bull market resumes with smaller longer term positional trades. Bull markets always resume unless you think that cryptos are dead. Tom Lee from Fundstrat, one of the few wall street analysts that cover crypto currencies, said in an interview that buying bitcoin' at 9000 presented the biggest buying opportunity of 2018. He also was very bullish on smart coins which we have been mentioning for a while. If you think your smarter than Tom, CNBC is interviewing, and I guarantee you Fundstrat has more resources then we will ever have.
Overall good thinking but I can not see where from do buyers come. To bring BTCUSD price higher we need more fiat to the market but all available exchanges are exhausted and spread thin already. This is just one (maybe smaller) problem. Another one is: have you seen mainstream news about bitcoin lately? They are not exactly encouraging. Few headlines I picked in 5 minutes from today:
"Bitcoin Is Going Below $5,000" - Forbes;
"Bitcoin biggest bubble in history, says economist who predicted 2008 crash" - The Guardian;
"Bitcoin braces for worst week since 2013 - BBC News - BBC.com;
"Bitcoin Tumbles as Crypto Bubble Shows Signs of Bursting" - Bloomberg;
"'Bitcoin is in trouble': the cryptocurrency has now lost half its value ..."
And besides all that: most of indicators I'm using (I'm not too good in TA) are still bearish in any meaningful timeframe (4H,8H,12H,D,W).
And then there is Google search. Pick any keyword: "bitcoin", "buy bitcoin", "sell bitcoin", "bitcoin crash", "bitcoin price", "cryptocurrency". Search volumes related to any keyword or phrase are falling.
I can not see any specific reason why we should stay above 7200 or even go higher. What sane person would buy bitcoin or enter the crypto market atm? I can not see any.
Any thoughts about that?
seananetsberger
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all that fud was orchestrated and released on purpose to crash the market. This is not a coincidence, the market is fully manipulated. It will turn around when the whales decide to they are ready to take profit.
tharvey30
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@seananetsberger, Sometimes I think the same thing, to a degree. But how do they coordinate this between all different media? Not arguing, just trying to learn.
iDS7
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@tharvey30, do you truly understand the power behind money and social psychology
tharvey30
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@Maustula, I guess to some degree. Any book recommendations?
iDS7
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@tharvey30, 1) Reminiscence of a stock operator. 2) Random walk down wall street 3) The new trading for a living 4) Money, master the game
redzter
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@seananetsberger, I think they already have all the positive news lined up and ready for release once they decide it's time to bring the price back up again.
Giovi6969
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@seananetsberger,
Crypto market could explode to new highs in some months as Nasdac seems to be entering into a parabolic trend, that means a highly possible Nasdaq important correction if the parabolic trend is confirmed.
macintosh
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@seananetsberger,
What fud. Stop fooling yourself. That how news work. It's not crypto specific, its how it is. It's news with clickbite headlines. Business as usual, just crypto folks see it kind of different way, call it FUD. And for sake of argument lets say "they" crashed the market. How it's going to go up again? Surely they do have a plan for that. What is the plan if you so damn informed? Anyway, don't want to argue over "whales", "they", "walls street" and "smart money" crashing and revieving the market in ednkess cycles (Deus ex maccina). It does not make any sense to bring market below some psychological level as lots of people flee from the market forever. Yes, you can call them "weak hands" but this is an irreverent attitude, they are not returning and they will warn their friends not to participate in this market. Power of recommendation always works.
Hope you know what Occam's razor is? Well, If you don't then please go and look over. In short: the simplest explanation is in most cases true. Simplest explanation here? The market is crashing because of psychology. "What psychology?" you may ask. Sure. Most of the people have recognized that cryptocurrencies don't have direct value and bitcoin as technology is outdared and has lost vision. Time to pull out.
@Omega77 Its called wishful thinking. Why on earth should "smart money" to come in? Price is just too high if you think for a second - BTC has currently two values: speculative and brand. Thecnology is outdated and there is no clear vision either, all promises given by Satoshi Nakamoto are broken. The brand is unusable for anyone not owning it so that leaves speculative price. And for the speculative price its just too damn high. If you look at volumes then you will see that they are really weak. Everyone who wanted it from this level bought it. I see volumes falling. No accumlation. So, no smart money at this level.
@BRRD yes, totally agree with you. It's the "Buy the Rumor and Sell the News". Bearish have not even close to a crescendo, the bearish news is just starting to ramp up. Those are just warnings sign from them (bubble is going to burst), we are close to the bottom when mainstream media is writing "Bitcoin is dead". We are not seeing that, yet.
Reading all those comments an writing here I came to a conclusion. The market is weak, too weak. We should have at least one proper bull trap on the way down here but no, there was none because the market is weaker than we want to believe. We will be around 1 weeks at this level if we have enough volumes and then we will go down again. First proper level to catch fall is either 7.2K or 5.6K in case there are volumes coming in, if not hen we will be bleeding to death slowly over course of the year. The technical analysis has nothing good to show us, fundamentals are even worse. Brace yourself, crypto winter is coming.
Go read what @MagicPoopCannon has to say from pure TA perspective. It's sobering reading.
SatoshiNiggamotozz
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@macintosh, hey man, first of all I want to thank you for your insights. I learned a lot from the insights you shared. The question I still have is why you think Bitcoin lost its vision and the tech is outdated. The technology is still in development (lightning network will cut fees and transaction time), implementation is happening, and the hype can turn around if some volume enters the market (this is very uncertain, now it's looking bearish but it can go both ways). As you probably know, this volume grows exponential as more people will jump the bandwagon to make a good buck. This will attract more people trough the power of recommendation (exactly reversed when we go bearish). To sum it up, my question is: Why do you think bitcoin lost its vision and potential to get adopted in the future?
Thanks again for the insights. It's very nice to have a proper conversation than typical MOON HODL CRASH discussions :) !
Overall good thinking but I can not see where from do buyers come. To bring BTCUSD price higher we need more fiat to the market but all available exchanges are exhausted and spread thin already. This is just one (maybe smaller) problem. Another one is: have you seen mainstream news about bitcoin lately? They are not exactly encouraging. Few headlines I picked in 5 minutes from today:
"Bitcoin Is Going Below $5,000" - Forbes;
"Bitcoin biggest bubble in history, says economist who predicted 2008 crash" - The Guardian;
"Bitcoin braces for worst week since 2013 - BBC News - BBC.com;
"Bitcoin Tumbles as Crypto Bubble Shows Signs of Bursting" - Bloomberg;
"'Bitcoin is in trouble': the cryptocurrency has now lost half its value ..."
And besides all that: most of indicators I'm using (I'm not too good in TA) are still bearish in any meaningful timeframe (4H,8H,12H,D,W).
And then there is Google search. Pick any keyword: "bitcoin", "buy bitcoin", "sell bitcoin", "bitcoin crash", "bitcoin price", "cryptocurrency". Search volumes related to any keyword or phrase are falling.
I can not see any specific reason why we should stay above 7200 or even go higher. What sane person would buy bitcoin or enter the crypto market atm? I can not see any.
Any thoughts about that?