I keep saying that the market is incredibly oversold
The injured former-optimists-turned-bears will have you think that their doom-and-gloom outlook on crypto is the correct approach.
If you're really short-sighted enough to believe that a 5 month downtrend trumps an 8 year positive trend, then you're what I class as being "beyond redemption", and I don't know if I can even help you. Nevertheless, I'm saying this for those who will listen: the market is oversold and is not going to stay that way for much longer! You can quote me on that.
From http://www.afrizap.com/en/realistic-tattoos/3d-tattoos-bursting-at-the-seams-inspirationsweb-com_
Bursting at the seams
What makes me so sure?
Well, in addition to the general positive nature of the long-term crypto total market cap trendline:
From https://coinmarketcap.com/charts/I have also started to notice something new. I have a lot of different coins and I check them all every day. For the past few weeks I've seen a trend which I could not explain. Coins would break out and spike in price. This is nothing new in crypto, it happens all the time, but here is the funny part: I could find no reason for the breakouts. No news, no hype, no tweets, rumours, listings, SEC regulations, lifting of bans etc. Nothing. They've been breaking out spontaneously for no particular reason. Weird.
Then this morning it hit me: the bears (majority of the market) are still too scared to turn bullish and start buying. They're all still waiting for yet another low (good grief...) as discussed in the link in paragraph 1 of this post. Last night I watched TenX shoot up over 30% for no reason, this morning I watched Power Ledger shoot up 90% - and then I realised what it was: the market is bursting at the seams.
Despite the bears holding it down through the sheer willpower of their negative sentiment, pockets of the market can no longer contain their buy impulses and spontaneous, isolated price spikes are occurring. I regard this as a very positive sign and confirmation that this market is more than ready to take off.
Shortly after my mini-revelation, the entire market shot up roughly 10%. It seems that sub $6000 BTC / sub $250 bn total market cap has simply become unsustainably cheap, no matter how the bears feel, and a spurt of rapid buying equalised the market at a higher level.
Further confirmation
Some of the more trustworthy TA tools I use are the Stochiastic Indicator and RSI. Like a MACD, they can be adjusted to show just about anything, but the mechanics behind these indicators is, I believe, more relevant than looking at the difference between two moving averages of unequal integration times.
As always, I harbour distrust and a modicum of disdain towards most of those who practise short-term TA. Let's look at the RSI and Stoch Indicators for BTC in the short-term:
Made by Bit Brain with TradingView
Yes, siree! The RSI and stoch on that chart show me a whole lot of inconclusive nothingness! Let's zoom way out and try that again...
Made by Bit Brain with TradingView
That's going back to 2011 and using weekly candles. That shows me something!*
Looking at the right-hand side of those indicators I clearly see a "Buy" indication and (according to the Stoch) an oversold market.
Generally I prefer to use an RSI over a Stoch when dealing with crypto, but I make an exception when working with USD pairs as in this case. The Stoch seems to work better with logarithmic growth, so both are useful in this case.
Very briefly for those not familiar with these indicators: Both the Stoch and RSI are used to indicate how overbought or oversold a market is. The closer they are to the top or bottom of their ranges, the stronger they indicate a sell or buy signal respectively. Stoch uses closing prices compared to price range over time, while RSI uses average gains vs average losses over a time range. The effect of both is to indicate change in price movements. But unlike most other indicators, the great thing about them is that they are leading indicators and not trailing ones i.e. they show something before it happens. A trailing indicator like a MACD will show a price event after it happens, nice for confirmation, but no good for prediction. Looking at the chart above I see a turning RSI and a turning, heavily oversold Stochiastic Indicator. Read into that whatever you wish, But I will make no secret of the fact that I think it's predicting a bull run.
Invest accordingly after you have done your own research.
Yours in crypto,
Bit Brain
Published on
by Bit Brain
oooh, look at you... level 52 :-) You can thank me for getting you into that investors club ;-)
I have to take issue with a couple of things you said. Being oversold or overbought doesn't mean the price is going to reverse. It can be oversold for months and months in a sustained downtrend, it doesn't mean anything other than indicate strong buying or selling pressure, there's no time element.
Also, there is no such thing as a 'leading' indicator. All indicators are based on historical price data so by default they must be lagging. If you can find an indicator that leads you'd be the richest man in the world ;-)
Glad to see you're doing ok on Steemit now and surpassed me somewhat, probably making more money on Steemit than you do on crypto, lol :-)
Hey there old friend! Good to see you're still alive and kicking! Bought any crypto yet? (It's a really good time...😉 )
Of course you would take issue at some of the things I've said, it's in your job description! I've missed having you around to keep me honest! As usual (and as per my job description), I will counter-argue my points:
You're quite right, the market has been oversold for a few months already. That pressure is so high that it's escaping in random outbursts. You can contain it, but not indefinitely! I time line is not definite, but it is limited.
I beg to differ on the leading indicator story. By measuring a change in price differences (i.e. price momentum) those indicators I mentioned can show a possible upswing before the price actually starts to move upwards. Momentum changes before price does!
When BTC turned positive:
The Stoch - first with an overbought indication, then a probable climb prediction:
As you can see that's well before BTC bottomed. Sure, nothing is certain, but used with other analysis techniques I find it quite reliable. And cough cough leading cough. Pardon my cough.
Yes the @investorsclub have been great. I've also been very fortunate to have been recruited by @timm as an Alpha tester/mentor for their platform which is under development. Beta testing opened today if you are interested.
You still doing your Steem gaming? I tried a little steemgar and enjoyed it. Perhaps I'll look further into Steem games when I have more time on my hands.
Damn, you still got that retail trader mentality, have I taught you nothing ? :-)
The most important thing is price, always. Momentum is derived from price movement, not the other way around. Have a look at 'reversion to mean', I wrote an article about it as well
https://steemit.com/trading/@tradergurl/crazy-exes-and-reversion-to-the-mean
I'm still playing Steemnova and doing ok so far, really enjoy it and it fits in with my trading day well as it's not a full time game, more like chess. I'll check out the timm thing, see how much of a scam it is lolol :-)
If you hit the brakes while driving a car you'll know roughly when and where it is going to stop before it does. You're not measuring momentum, you're measuring rate of change of momentum and predicting future speed from it. Same with price.
TIMM is completely scam free. They aren't making any money from it, at least not yet. Later on it will have subscription services. I chat to the developers daily on discord, a good bunch of people. Note that it's definitely not a finished product yet.
Using a car is probably a good analogy. You're using an assumption that the car is going to come to a 'predictable' halt. What if the car just slows briefly and then speeds up again ? Unless you're psychic and can tell the future then you just don't know.
You're making the same mistake that all retail traders make, which is to believe that the indicator is telling you something that it's not. It's no coincidence that 95% of people lose money trading, and it's because they all believe the same bullshit.
Have you never questioned that ??? I mean at the end of the day it's literally a 50/50 decision at worst, the price is going to go up, or the price is going to go down. So why the fuck do 95% of people get it wrong ? The statistical probability of being 95% wrong on a 50% chance is astronomical....
You need to understand that all the knowledge you've obtained is part of a huge industrial system designed to take the money from dumb people and put it in the pockets of rich people. Virtually everything you think you know about trading is wrong, deliberately !
I know your not exactly a newb but I'm genuinely trying to help you from my own experience. I used to be where you are, and lost an awful lot of money. When you start trading full time, looking at charts for 12 hours a day, 6 days a week, all the bullshit becomes very evident very quickly. Virtually nothing works as it should in the real world, only in dumb YouTube 'tutorial' videos with referral links to brokers. I really wish you could see it man, I really do.
Sure, look at all the past performance charts and mentally curve fit all the 'good' results that fit with your indicator (and gloss over the fact that 3 times as many occasions don't work). Anyone can be an expert after the fact. Try doing on the right hand side of the chart, where you have to do it in the real world as the patterns form and you don't have the value of hindsight...
Like I keep saying though, the proof is in the pudding. After a very long slog and a couple near misses I now make reasonable money at trading. And I do it exactly the same way that the other 5% do it, because we all do it the same way, no magic. Like an alcoholic, you first need to accept you're in the 95% and you don't know shit before you can become a sober 5%'er.
Damn, I miss writing articles, but as I found out on Steemit it's pointless trying to teach people how to trade for a living when everyone is already an expert and know it all already :-) They just never admit that they suck or need to learn anything, so probably don't deserve to be rich anyway ;-) (not aimed at you)
Hey, you might just be right. Not about trading in general, you're definitely right there, but about me specifically.
Thank you very much for your efforts and explanations, I mean that from the bottom of my heart.
I know you and I see this world very differently, and that's okay. In the same way that you wish I could see the manipulation of charts, which I can't - at least not like you can; I wish you could see my holistic future for blockchains.
Unfortunately one of us is going to be wrong. I would be remiss to assume that it isn't me, thereby demonstrating the very optimism bias I like to warn against. At the same time, and taking into account what you say, I can't deny the conclusions of my own research and deductions. You might not agree with them (okay, you clearly don't agree with them), but I'm sure you can see the folly in doing the opposite of what you believe. Best case scenario: I'm right and you'll lose nothing because you have no crypto. Worst case scenario, I lose my favourite hobby as all my coins crumble to zero while you say "I told you so!".
I hope you will reconsider blogging a bit again. I enjoyed your posts. You may not have had quantity in readers but you did have quality ones! 😁
I'm sure I've said this before, I'm actually a crypto enthusiast and want to see it flourish and grow and I hope it does. I probably care more about crypto than most of the people on here !
The difference is, I want an anonymous means of peer to peer wealth transfer outside the regulation of banks and governments, whereas everyone else doesn't give a shit about it, to them it's only a means to make a quick buck, get rich quick (lol, are they in for a shock).
Speculation has completely ruined crypto for now. In order for it to work properly and be used as an actual currency then the price needs to stabilise, so all the speculators should just fuck off and leave it alone.
The irony is, the price won't rise unless the mainstream financial industry gets involved, and it won't get involved because it's too unstable ! Talk about a catch-22...
That's just my views anyway, I love crypto but it got ruined by greedy assholes who don't care about it. Until everyone leaves it alone it'll almost certainly remain on the fringes. I look forward to the day when everyone drops it, becomes stable, and can be used for it's original purpose as a means of transaction.
So we both want crypto to do well, just for entirely different reasons :-)
Spammer!
@bitbrain I am going out on limb here but I would bet you have never seen this @tomask-de account before. He is a spammer who uses the same comment on hundreds of posts hoping people like you will up vote the comment. We don't need people like this trashing the place up. Your votes are yours do what you like with, but I would suggest that you look at accounts you don't recognize and see what they are all about before up voting a comment that is generic such as the one he makes.
This account doesn't deserve up votes , it deserves flagging in my opinion and I did flag it for the exact same comment. I gave him 12 hours to remove it and then extended it another 3 hours and that was enough for me. I hope that you will help to watch for accounts like this in the future and react accordingly.
Have a nice day.
@sultnpapper
Noted. thanks for the heads up.
You are welcome.