Bitcoin TA. Is the current growth natural?
Those who watched the development of Bitcoin price over the last few days, had to be very surprised. I admit that even I was surprised and not quite prepared for this situation. The pump from 6070 USD to 7500 USD surprised probably everyone. In addition, it happened very quickly.
Fast game of speculators, or natural demand?
The first increase was on Monday 16th of July when a 6300 USD breakthrough punished me for disobedience, as I was holding a short position which I should be already closed according to my strategy. So I closed it with a loss (fortunately, I do not short with large amounts). It did not even reach the 6800 where started a “necklace” of appearing Head & Shoulders pattern and another breakthrough happened that has sent a price over 7200 USD maybe just in 5 minutes. At that time, I was driving on my way home from work. In the past, I have been saying that I sometimes trade while driving, but jumping into this FOMO growth was very risky.
Let us speculate what was behind such growth. Was it a natural demand? I do not think so. Very similar candles we saw at 12th of April when the optimism still ruled, but it eventually broke and, since May the price has just been falling. Although it is important to admit that lately, from different ways, I have heard of growing interest in OTC purchases. And that is not about small amounts, but big OTC investors demand hundreds of thousands Bitcoins. Calculate that at a price of about 7000 USD. Could the rise be the result of such demand?
Another reason for the growth is a chance that the authorities will finally approve the ETF Bitcoin fund, which would attract institutional investors to the world of investment (and speculation). And there is a lot of money. On the other hand, this is not the first attempt, and the US SEC will not give permission to anybody. It is possible that growth is on the one hand a speculation that the ETF will eventually be approved, or even the possibility that somebody already suspect that it will happen.
Another explanation may be from a technical analysis. The appearance of the H&S pattern could convince many traders to boy. Many of them probably just gave the buy stop order under the neck (in this case, at a price of 6800+) and the growth was because of triggered stops, which quickly raised the price against low liquidity. It is even possible that the initial growth from 6100 to 6800 was pushed by some whale intentionally.
Altcoins are dying
It is certainly interesting that only BTC is growing. The vast majority of altcoins grew a little bit, but now they have fallen to their original price. For example, ETH/USD returned with the price “into the valley”. ALTs falling and BTC growth could indicate that the demand is growing mainly due to the forthcoming ETF.
The current situation makes the analysis very hard. Firstly, if we look to the history, somewhere to October to November 2014, when many people considered the price as bottom. AT that time, the double bottom appeared and, as a result, a growth to the 450 USD from 310 USD happened (which would correspond to today’s 8500 USD). Then there was a bounce and another fall of roughly half the price, and by the beginning of 2015, the BTC price was in the range of 200-300 (today’s 3800 USD – 5800 USD). This part of the graph can be seen in the gray box on the current chart.
I just want to warn that the growth to 7500 USD can be a common bull trap and at the same time, a Bart’s head on a subtle chart, and also the highest price for the next few weeks, especially if the entire crypto market begins to be pulled down by falling ALTs. However, the roles of approaching ETF and a great interest in OTC can make entangle the whole situation.
What to recommend? I do not know, I am currently in a semi-mode, half bought, half sold, sometimes I short but I do not expect further growth. In the next week, I see the space for some valley rather than for continuing somewhere higher. The FOMO purchases can be there before August the 10th. Or maybe not, I have also read that SEC will not issue any statement on August, but perhaps in September...
Sentiment in the market, interest...
After the 7500 USD pump, the Bitfinex short positions looks like an army after the Battle of Waterloo. In total, there are only 20000 BTC in shorts. The pump did not affect the open longs, after the pump they just slightly dropped and there are 34000 BTC in long positions.
TOP traders at OKEX vote 57:40 for long and invest 27% in long and 18% in short.
Recommendation: The growth was really quick; I definitely do not recommend to buy at the top. Maybe wait for it to decline to 38% of growth, or 62% of growth. If you want to risk, do not forget to set a stop-loss. The price did not fall under 7235 USD and did not rise over 7600 USD.
Disclaimer: These articles cannot be considered as an investment advice, and it is still a good idea to make speculation on bitcoin stock exchanges only with funds you can afford to lose. The high-profit potential is balanced with a significant risk of losing, especially here on the crypto markets.
Česky: https://btctip.cz/bitcoin-technicka-analyza-je-soucasny-rust-prirozeny/
What do you think about going short on 9th August? Does it make sense? Selling the news... As you mentioned, there will be probably no result on 10th but next month.
No, pokud se budeš chtít odhodlat k tomuto, budeš muset sledovat předchozí vývoj, zda by slabší výprodej mohl vyvolat nějaký větší sešup. Pamatuji si, že před zamítnutím prvního pokusu o ETF se optimismus šířil nehorázným způsobem a právě zamítnutím se optimismus utnul a šup dolů. O měsíc později už však definitivní zamítnutí nemělo žádný vliv. Takže kdo ví, jak velkou sílu bude případně zamítnutí mít. Záleží hlavně na tom optimismu s možným přijetím ETF spjatým. Každopádně to, co popisuješ je samozřejmě velmi riskantní krok, takže doporučuji do toho vložit menší peníz, případně nastavit stop-loss. Ona beztak i nějaká ta velryba se těší na pořádnou paniku, takže samozřejmě dodám, že na margin si dej jen to, co můžeš ztratit. :)
Great post!
Thanks for tasting the eden!