It's been interesting to say the least since Sept 13th. As we have always stated trading corrections can be extremely difficult even for the best traders. The irony is as many times as I have changed my path have come back to almost my original theory on how the correction would happen. The only difference is the extended top. I've seen other counts out there that bend the rules and or seem valid but this one has been the one is the one that met the basic three rules for EW and why I stuck with it even though I've modified it along the way. But with BTG' behind us and B2X' appearing to lose momentum, the path originally laid out may have been the correct one to begin with. Of course we did not expect the extended top which is pretty rare. Now this by no means states we can not go higher from here, and I'm sure we will get a little surge in the next few days, but as long as $6250 is held I'm feeling confident we are bound to correct from our long term run.
Fundamentals - Bitcoin Gold went over like a lead rock. Immediately they were met with a DDoS attack. Even Trevor issued a warning that Bitcoin gold was not safe and the code was not finished. This is not good and shows lack of planning and a rush to get a coin to market before insuring the safety and work-ability of a system. For this the get a big fat F. Litecoin immediately had a pop in price, but this has subsequently subsided as there is still confusion as to what may or may not happen. For this reason I still feel Litcoin is not tradeable (but you can add here). I like direction, and right now there is none and Bitcoin gold is a competitor to both litecoin and Dash.
This leads us to the second fork Segwit2x. Well here we are starting to see some conflicts among the miners as well, with 21% of companies supporting it and 21% of companies against it with the remaining undecided. For good reason, look at the roll out of Bitcoin gold, talk about a flop. coin.dance/poli We also mentioned that Bitcoin Cash has already resolved many of the issues that both bitcoin gold and the segwit2x are attempting to resolve. My question is, why not leave a good thing alone? Bitcoin cash addressed the scaling issue, is faster, and is even cheaper than litecoin when it comes to fees? So what does Segwit2x provide? I think many will start thinking, do we really want to dilute risk this for little reward ?
So this takes us to the chart. And though many think I've been bearish forever, I'm really not. I think long term Bitcoin is going up from here, but corrections are necessary in markets as they bring in fresh money to invest. We are not seeing any fresh money enter the space, at least in the amounts required to drive prices higher. We have lost 5% of the overall market cap in the past few days and we are still down close to 25% if you remove Bitcoin. For those new to investing this is NOT a bull market, quite the opposite it is a bear market.
What do we do in bear markets. Well after 30 years of watching markets, I have come to one conclusion. Cash is King and it' time for bargain hunting. Just like a rising tide raises all ships, low tides lower them. We have been buying the likes of NEO' and OMG', We have added to BCH' recently as well as ETH', DASH' and XRP'. Good quality coins in my opinion that are trading off their highs. Why would I be looking to buy BTC' at it's high in an overall market correction? I've even looked at buying a few other coins like LSK' QTUM' and CVC' to add to the speculative portfolio. (just a few bucks nothing to go all in on). This is where patience and money management pays off. I've seen the best TA's get caught in bad trades. I do not want to be one, so I will just wait patiently and continue to look for deals. Those few hundred dollars lost could be worth 10's of thousands in a few years and I'm not risking it.
So I still have my core position of BTC, but I'm not adding until we get a better price around $3500.
Komentarz
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Entering a critical RSI level which when broken the last three times BTC retraced to the 0.615 level. I color coded it ;)
Komentarz
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Interesting that the long and short futures are not correlating with each other. Make of it what you want but this appears to me a trend change is coming.
Komentarz
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For those of you thinking of shorting as we are testing the 60RSI level I would recommend reading MarcPmarkets post a few minutes ago. I have the utmost respect for Marc as he has been trading on wallstreet since the 90's and is probably one of the most experienced chart readers you will ever come across. He has traded through several bubbles with wall street firms and his experience is second to none on TV.
Check out price on a 200 day moving average. The current price is not too frothy in that respect. Going down to $3500 would be a huge crash based on a 200 day MA, not impossible, and perhaps it could go down further, but such a result is highly unlikely. Admittedly, how to value a crypto asset is a contentious argument these days. After all, it's a new asset class. What makes BTC different than other cryptos is the percent of buyers, speculators, traders, etc who hodl the coin. It's much higher than others. According to coinbase it's somewhere around 60% of BTC buyers hold long-term. Therefore, it would seem to me, TA in this market must be used differently than in traditional markets, as well as other cryptoassets. Staying out of BTC market entirely (which isn't what you're suggesting, I know) seems more risky than staying in.
heisginger
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@Saylo, why is holding long term any different to say investing in TESLA? Both have long term visions and claim to offer disruptive tech.
Saylo
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@heisginger, Like I said, BTC is a new asset class. Significant research could be done to derive an objective method for valuing such an asset. TESLA, while perhaps also technically "disruptive" is not a new asset class altogether. Thus traditional methods for valuation can be utilized.
goldbug1
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@heisginger, Tesla has fundamental issues like cash burn. Two different issues, but it's sentimental just like bitcoin so in that way they are similar!
goldbug1
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@Saylo, agree it's always more risky to stay out of a market. Trying to time markets is very risky and more than often fails, what we are looking for in corrections is to add to our long term holdings.
thank you for commenting!
b_fairheart
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I see you're still calling bear. You were late getting in on the train bro, it's never going back to sub 3000k levels again. Maybe it will re test 4k at max but these constant bear calls are getting a bit boring now.
renzogv22
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@b_fairheart, same thing we all saw last september. everyone was thinking we were hitting 7k, two weeks later we were under 3k. i mean, nothing goes always up. we need a good correction, just check the weekly charts, and also months. there is a very big divergence over there. we will eventually have a very big correction, in my opinion we might see bitcoin under 2800 soon, maybe before the end of the year. and thats great. because thats the normal thing to happen like in every other market. we are still bullish in the long term though.
I doubt we ever go under $4200 and willing to bet on that. Although, I would LOVE to see that happen. Similar caveat as yours and goldbug's "were still bullish in the long term though" statements. I agree that goldbug was late to the party and that is why he keeps calling for bearish sentiments. However, a correction is due, I think its not coming just yet and wouldn't bet against BTC before the upcoming fork.
goldbug1
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@eag09, Not so sure we were late to the party when we called for $2985 when we were around $4500, and then called $4200-4400 shortly after. We also said a break out of $4750 takes us to $6000. I think many new to investing do not realize that there are key levels of support and resistance and you have to see what happens when we get there. There are several paths and the support resistance lines are what is critical to watch to verify direction.
Thank you for commenting.
eag09
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@goldbug1, I think people refer to that as in you bought in 2017, huge difference, obviously being late to the party. No need to lecture me on the technicals, I’ve worked on Wall Street before. Like I said, I agree with your point on that a correction is looming and probably the biggest we will see to date. HOWEVER, not so fast my friend (Lee Corso voice), time will tell if 7k (or above perhaps) was/is the target.