Dear traders, I believe we are at a critical juncture here. Quite possibly, China allowing shorting of their currency might have made the USDCNH pair bottom last Friday. This is no minor news, and if we study the chart we might be able to understand the relationship between the chinese Yuan and cryptocurrencies.
Since 2014, that USDCNH bottomed, it spent a long time basing, before starting a prolonged bull market. On the way up, said bull market was showing signs of exhaustion, which us, using the Time @ Mode methodology could see and anticipate. ByFebruary 2017, it was clear that bull market had ran its course, at least for a few months. After a period of distribution, with the government making efforts to strengthen the Yuan, severely punishing speculators, forbidding the shorting of the currency, and increasing rates to borrow the Yuan, the market topped and started a strong decline. The signals on chart indicated a fall to at least 6.54509 was warranted, within March/April until November/December 2017.
Since this target was exceeded, it is likely that the market is bottoming, or possible bottomed. This doesn’t mean mmedate upside, but possibly a period of basing in the daily or weekly timeframe might ensue. This aligns with the time duration of the decline, ending by November or December of this year. After the end of November, if USDCNH bases around here, the market will be ready to surge upwards during December!
How does this matter for cryptocurrencies? Well, the long term forecast I made available long ago, with the only change being the price target getting extended to 6303.98, had a time duration of 20 months, culminating during November/December 2017. This also happens to correlate nicely with the timing of fundamental events that can derail the bull market in crypto like the Segwit2x hard fork, and interestingly, with a period that already started, that of increased scrutiny and regulatory oversight, which might culminate in the start of a 20 month bear market in BTC, which is what the long term technical charts suggest.
Now, what are the risks? There is a chance we already topped, since target #1 in the weekly was hit, and we already saw some pressure from bears lately, but there is a larger probability that the market won’t fall immediately, since I assume that the smart money will need time to liquidate their holdings. How can they buy themselves time now? Maybe approving an ETF for trading in the US, like the Winklevoss, and maybe even the ETH ETF surfaces and is approved...But, I’m pretty sure, that the writings are on the wall, the start of a 20 month bear market in BTC is well overdue, so, I will start taking precautions. First, I will look to accumulate long positions in the USDCNH pair, as my first move, and econd, I will be ready to hedge or liquidate holdings if needed, to then redistribute to my other accounts in equities and currencies, reducing my crypto position to only 25% of my net worth. If we do start a bear market, shorting might be a profitable endeavor, so, why not?
In the short term, I’m following sentiment and technical charts, to determine if my bullish outlook is correct or not.
Best of luck!
Ivan Labrie.
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Added to USDCNH today, long entry in profit, acting well for a potential long term bottom. Adding more tomorrow on dips.
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BTC bottomed for now, I expect one more strong rally before a peak for the next 20 months. It might last until November and then down. Once we break the highest high again, and shorts get squeezed, sentiment will become extreme enough to hit the market top.
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A guess:
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The uptrend is in danger, many flipped long, I think people might be underestimating the immediate fundamental risk -even I was guilty of it-. I closed my longs opened at $3007 in profit today, I'm waiting in cash until this situation is resolved.
Ivan, I just want to say I love your analyses! You are the reason I come to TradingView everyday and I have learned a lot by passively following your process. Thank you.
I was wondering: how do you predict Ethereum (and other cryptos) will be affected by the 20-month BTC bear market? WIll you seek to reduce your position in ETH at the same time as BTC or are you much more bullish on ETH around November time? One way of looking judging what will happen that fits well with BTC bear markets in the past is the observation that a BTC bear market usually means a crypto bear market in general; and in fact altcoins may significantly underperform BTC in a market dynamic like this. However the alternative view is that profits taken from BTC can flow into ETH and further fuel an ETH bull market around year end; the fundamentals for Ethereum seem quite solid to me, never mind the lagging sentiment. What are your thoughts on this?
I think everything would fall, after BTC tops, I doubt any coin can go up by then. What can happen is that during the choppy bear market decline there are rallies in different coins, same as in 2014 really...
Cheers.
janor123
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Any update on targets?
KLYP_Investment
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omg, touching 10000, and then pull back to 3000 again? that seems so horrible....
IvanLabrie
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@tlzkrh1029, I calculated that after the peak, between 6300-9500, we might see a 65% decline possibly. And a 20 month bear market.
KLYP_Investment
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@IvanLabrie, possible expectation.. just like 2013
HondaJr
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Hi,Ivan! You said "It might last until November" Is it because of Segwit uncertainty? or anything else ?
IvanLabrie
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@HondaJr, multiple factors can cause a market top, which aligns with my technical forecast. The end of the long term 20 month rally we had predicted back in 2016 is by Nov-Dec 2017. The fundamentals will become gradually clearer, and we will know for sure after the fact, what caused the peak, but we can prepare for it, and be ready to exit in profit and go short then.
I was wondering: how do you predict Ethereum (and other cryptos) will be affected by the 20-month BTC bear market? WIll you seek to reduce your position in ETH at the same time as BTC or are you much more bullish on ETH around November time? One way of looking judging what will happen that fits well with BTC bear markets in the past is the observation that a BTC bear market usually means a crypto bear market in general; and in fact altcoins may significantly underperform BTC in a market dynamic like this. However the alternative view is that profits taken from BTC can flow into ETH and further fuel an ETH bull market around year end; the fundamentals for Ethereum seem quite solid to me, never mind the lagging sentiment. What are your thoughts on this?