I have become a big bear in Bitcoin from 2018 to June. Capturing April bullish movements from lows and June/July upwards moves. Predicting this bullish move is very difficult because most of the signs (TA) indicate a more bearish movement, especially in April. Just as most of the highest I predicted in that period, this is also a very difficult call. It is not easy to fight extreme sentiments combined with TA signs that confirm that too. That’s why being/staying objective all the time is very important.
2 of my biggest advantages are:
– I have no personal attachment/interest to Crypto.
– The FOMO virus is no longer a part of me, which has become a problem 1 for Crypto traders in 2018. Professional traders have fed this through 2018.
FOMO is not only a problem in Crypto, it is a problem in every market AND in every time frame. In a hype market it is clearly far more extreme, as most of you have learned the hard way in 2018. Reading all the predictions of the famous crypto preacher, says Bitcoin will be 50K or 250K. What kind of idiot would you do to NOT buy bitcoin ‘at a price of 8K or 10K “knowing” is above 100K. VERY difficult to ignore all these influences. A simple example where Goldman Sachs predicts the stock market will rise higher 2 months ago and Tech shares like Amazon and AMD ‘pushed higher (like coin coins in crypto) created FOMO even on the stock market. We have seen what happened in the last few weeks on the stock market, even recording dumping. It’s up to us to do our own research and I can tell you, logical (objective) thinking is always the best strategy.
https://www.cnbc.com/2018/08/13/goldman-says-rosy-scenario-could-see-the-stock-market-surge-from-here.html
I personally paid my dues during the Dot Com bubble and also learned it the hard way, that FOMO is something we need to learn to fully let go. Because even if you win big, it’s only a matter of time until you return everything. This will give you more peace of mind when FOMO is not part of your system.
Back in business, I have switched a little from big bears to neutral/bullish in the last 3 months. For reasons that I have mentioned several times in the analysis that I posted in the last few months. But the last few months have changed again and I am almost ready to throw my bullish towel in the ring. I have switched to neutral for the past month or so because the bearish factor continues to increase, with low volume being the number 1 problem. I have several reasons to be bullish in recent months and some are as follows:
– 6000 support zone gets stronger and slowly even moves up (higher low)
– Alts made a low panic 2/3 months ago with a high volume which showed a lot of accumulation occurred
– It becomes more difficult to read sentiments on TV, but what I’ve seen is more bears than bulls in recent months.
The biggest problem for the market in the last few months is the low volume, which decreases every day. It was bad a month ago but it gets worse every week. In general this means there is no/low interest in this market, with current prices. So in general the price must go down to the level where the market does NOT have interest. Whether it’s at 5500 or at 4800 or maybe in 2000, it’s impossible to know in advance of course. The only thing that is confusing in Crypto is the short cover section. This has been a (too) big factor in crypto. I give a small chance this time that for example Bitcoin ‘will have a short pressure above 7000 that all volumes suddenly suddenly enter the market again to start a new rally. Actually, as we did in April. This has worked in two ways, which means there is also a long pressure.
Currently low levels on Bitfinex and open shorts are higher, so if they pull tricks with this it might be a short pressure. But don’t expect much from Bitfinex though because the volume there is greatly decreasing!
Much more important and significant at the moment, is OI (open intrest) on Bitmex, even though volume has dropped like 80/90% there too, OI has reached the highest level in some time now. So big steps may only be a matter of time. OI is now at 840 million and usually drops to around 600 million, so this might be a 250 million dollar fuel that will be pushed into the market usually in a few minutes. With the daily volume on Bitmex which is even under 500 miles now (where it usually has an average of 4,000 miles) it will trigger a big step. Bitmex prices have moved above the price mark (the average price of Bitstamp, Coinbase and Kraken) indicates that there are bulls who are willing to buy here.
Now the question is, does this smart money accumulate here or is this bull being fooled.
When things are not difficult enough, tether the weight to the market also in the past month. Creating more uncertainty in this market. From the looks of it we can easily see this coming to an end soon as it continues to get closer to the level of $1 again.
For the short term, I see several options:
– The fast movement down towards 6150 and moving up quickly again, if this happens, all of this might be a bear trap and the big move that I predict will probably go up.
– Bear flags will now reach their target around 6050, when this happens we might see more downward movement in the coming period.
– Current important support at 6200/6250 holds and we will see the possibility of Bart moving back above 6400, creating a lower lower.
I have changed the trend line slightly to the horizontal trend line, showing us a bearish triangle. I have changed this because the higher the pattern pattern I talked about at the beginning it doesn’t look like it should. So if 6000/6200 is broken, I don’t see another scenario besides the decline towards 5000. I have drawn a blue trend line that might be around 5000 where we should see some support. On my left has drawn a blue line too, showing us that 6100/6150 is a big support level too because prices have soared from this level many times in the past few months.
I have tried to provide an objective view here, but the low volume of recent months makes TA very difficult and unreliable because manipulation is even easier than it used to be. Only the ‘safe’ games that I see here for now, remain outside this market until we see a gap of 6500 or 6000.
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