Bitcoin Death Spiral Underway — or Something Else?

in #bitcoinlast year (edited)

Bitcoin’s current correction has developed into a descending broadening wedge that is normally, most often bullish projecting initially back up to the starting price ‘A’ — which is $10,500 for Bitcoin:




Bulkowski’s Descending Broadening Wedges

Yet this is the first time I can recall or find such a descending broadening wedge of significance in Bitcoin’s history — i.e. visible on the 3 day and weekly chart.

And Bitcoin’s current broadening, descending wedge is much steeper and broader, thus allowing for the possibility that the price never breaks out of the wedge and instead could plausibly (within a short-period of time) remain in the wedge until the price is very low or zero:






(click to embiggen)

It’s as peculiar as Bitcoin Fractal Projects an Infinite Price.

This current flash correction is congruent with the chart prediction in my prior blog Bitcoin’s Fractal Acceleration Entire History, and is indicative of the flash crash sometimes seen right before breaking out of the major bullish, narrow wedge:


shelby3 published on TradingView.com, February 29, 2020

Click here to view the live version of the above chart.

That updates a chart from my blog Bitcoin’s Whiplash Bear Trap 3 months ago:

I’m expecting the superimposition of a tweening of a prior fractal similar visually to the following:


(click to embiggen)

Yet I’m always willing to question my beliefs and prior analyses based on new information.

Invalid Pattern?

Some might claim that structure means the pattern is invalid unless it will be bullish, because there’s no reasonable way for there to be a bona fide, bearish breakout under the steep, lower trendline that forms the pattern (other than dropping nearly straight down continuously which isn’t plausible).


RIP XIV: “Fucking hell. I can't believe it. Just like that it's gone.”

No Fundamental Value?

An asset with fundamental value and demand can’t crash to zero. At most the leverage can be popped and the assert declines to the price where the leverage-less bids stand.

Demand for safe haven assets is increasing with the recent pandemonium and chaos in the world. If many have been cash flow negative because of the recent virus, there’s still fundamental value at some lower price wherein investors trade other assets (e.g. cash) for highly undervalued assets. I do not agree with any rationale that states Bitcoin never had any fundamental value. That is patently and obviously false given so many people are using it as a digitally, transportable store-of-value — not to mention the cumulative mining sunk costs investment which are the tangible facet of the Bitcoin asset.

To crash the fundamental value of an asset to zero, thus requires destroying it and/or to redirecting its fundamental demand to a replacement (or the non-impostor, original) — which is what I posit will happen to Bitcoin Core at the May 14 halving being replaced by the original, legacy Bitcoin (not BSV).

Premature SegWit Donations Attack?

Could that posited SegWit donations attack be starting now?

I had posited that it would desirable to increase the price of Bitcoin to very high levels before the halving and start the attack at the halving, as Craig Wright had warned. Because the halving will cut the miners’ revenue in half if the price doesn’t increase, and the higher the price above fundamental value, then the ease with which to pop the price balloon crippling all those miners who don’t switch to mining blocks with Segwit donations to increase the revenue per block. Also this would incentivize a much higher mining difficulty before initiating the said attack, thus leaving Bitcoin Core stuck with a high difficulty that maybe never readjusts because perhaps maybe only one block per day or week would be mined (and 2016 blocks are required between difficulty readjustments — not necessarily 2016 × 10 = 20,160 minutes which is only 14 days).

Whereas, instead decreasing the Bitcoin price somewhat slowly over a period of months (as I depicted by the annotations I added to the Bitcoin chart above) would allow the Bitcoin Core difficulty to readjust lower. The SegWit attack must be a sudden and continuous drop in the price.

Why would they start that attack now when the price has dropped nearer to fundamental value and not first drive the price skyhigh way above fundamental value? Because I discovered their plan and have been writing extensively about it? Not likely. Because they want to start the attack from a lower price to increase the losses on those who were going to cash out on a very high price before the halving? But most Bitcoiners never read my stuff and they don’t believe me. Most are going to hodl right on through the halving thinking that the price will go even higher later. Also at a very high price, FOMO kicks and people want to buy, not sell.

Can Only Be Bullish — Signifies Opening of a Massive Bullish Fractal

It reflects transitioning from a smaller fractal to a large one, due to wave interference from the large fractal. This means the next bullish move is going to be much greater than the one to $13.5k.

This is playing out as my model had predicted.

UPDATE: 8 Hours Later

BTC/USD is very close to a bottom if not already. Should be back to at least $8.6k with a couple of days and back up to the contentious $9k$9.5k zone later in this week.

May have one more minor leg down which may or may not form a lower low. On the linear scaled, 6H (6 hour) Kraken chart below, it could decline to $7650$7820 and on the Bitstamp to between $7450$7750:




(click to embiggen)

Here’s the logarithmically scaled 1H (1 hour) and 1W (1 week) charts for both exchanges so you can get a helicopter overview:








(click to embiggen)

Ethereum

Ethereum had broken up out of its long-term, bullish wedge, and may be declining back to test the top that wedge before going much, much higher. Also it has just narrowly already broken out of the nearest-term bullish, descending, broadening wedge. Looks like it may not have bottomed yet and may fall back into that nearest-term wedge make a lower low ~$178$186. Although it could fall just to test the top of that nearest-term wedge at ~$195 (and lower if the posited decline is delayed).

Here are the linear scaled, 6H (6 hour) charts for both exchanges:




(click to embiggen)

Here’s the logarithmically scaled 1H (1 hour) and 1W (1 week) charts for both exchanges so you can get a helicopter overview:








(click to embiggen)

For ETH/BTC I’m targeting a bottom 0.02310.0246 and most likely is 0.0236. The lowest I could imagine from these charts would be 0.0219 (and ETH/USD $169):






(click to embiggen)

Litecoin

Litecoin has not broken up out of its long-term, bullish wedge, and probably will only do so after the May 14 halving presumably as priced w.r.t. to a Bitcoin Core that is collapsing towards ~$0 due to the posited SegWit donations attack.

Litecoin appears to be declining back to test the long-term support analogous to Bitcoin. Looks like it may not have bottomed yet and may make a lower low ~$43$44.

Here are the linear scaled, 6H (6 hour) charts for both exchanges:




(click to embiggen)

Here’s the logarithmically scaled 1H (1 hour) and 1W (1 week) charts for both exchanges so you can get a helicopter overview:








(click to embiggen)

For LTC/BTC I’m targeting a bottom 0.00550.0060 and most likely is 0.00574. The lowest I could imagine from these charts would be 0.00532 (and LTC/USD $40):






(click to embiggen)

UPDATE 17 Hours Later

Bitcoin has convincingly broken up out of that aforementioned nearest-term, bullish, descending, broadening wedge. But the altcoins have not moved higher, thus indicating to me that the altcoins are primed for huge drops when Bitcoin declines again to retest its tentative bottom.

Looks like Bitcoin will merely test the current bottom and not make a lower low.

The market fear and “blood in the streets” has now reached the level for another huge surge and bull market:


Crypto Fear & Greed Index



Sentiment History: Crypto Fear & Greed Over Time

UPDATE: 24 Hours Later

The spike down to ~$7700 occurred as predicted, but the altcoins didn’t capitulate yet. That extremely vertical rebound indicates likely to fall back down and dump through that ~$7700 support and down to the next ~$7450 level.


(click to embiggen)

Maybe Bitcoin needs to dump down to that ~$7450 level to scare the shit out of the altcoins and trigger the climax stampede?

@masterluc’s $6k Prediction

Someone wanted me to comment further on @masterluc’s $6k prediction, which I had rebuked in my blog Bitcoin Movements Ahead on the Way to the Moon about a month ago in February.

Note @masterluc — who amazingly correctly predicted the December 2019 ~$6k low a year or more before it occurred — has often failed with his shorter-term predictions. And his recent updates appears it will be another incorrect prediction because in my opinion/analysis he has drawn the bottom of the wedge too low (by not intersecting the December 2018 $3k low, which is marked “a” on his chart):


(click to zoom and read)

I’m surprised he would (intentionally? deep state propagandist?) make that mistake because the line which correctly intersects the $3k low has intersections with the lows going back several years and is a line that I think he has himself noted in the past. That’s one of the reasons why I’m confident he drew it incorrectly.

[…] And he has a reasonable point that the overhead resistance for the top of the bullish wedge can be drawn lower than $11.5k or even lower than $11k.

And I can find evidence that @masterluc’s thesis for a correction may be correct — excepting as already stated in my opinion/analysis he drew the bottom of the wedge incorrectly and thus he exaggerates the severity of his posited correction and the duration for a potential move to the bottom of the wedge.

[…]

In that case, Bitcoin may be poised to decline back to the correctly drawn wedge bottom as it did in March 2019 perhaps before rising above $11k.

The logarithmic chart support line originates from 2016 (c.g. the chart earlier in this blog with the thick yellow annotated lines), but that applied to the $3.1k bottom in December 2018. Since then a new support line applies on the linear chart (because it hasn’t involved enough duration and price expansion to require logarithmic market consumption). Or perhaps some interpolation between the two.

Here’s how to correctly draw that support line on the linear chart:


(click to embiggen)

Click here to view the live version of the above chart.

Note the expected bottom on the chart above is ~$7.2k. Interestingly the Gemini exchange already registered a spike low to $7.3k. And Bittrex $7.0k.

As Bitcoin breaks down to $7.2k everyone will panic thinking that it will fall to below $6k where the 200 WMA is. And that’s what it takes to make a major bottom. We need a massive panic. The volume is still too low. We need capitulation on the altcoins and a volume spike, when the bottom arrives. Coming soon…

The deeper and more egregious this SLINGSHOT spike low, the more vicious and vertical the rise, because this will scare away the plebs so that the insiders can use their millions of printed-out-of-thin-air Tether to ramp up the price without too much leakage (i.e. they will just be mostly buying from themselves to mark the prices higher and higher). The greater fools will come back and buy the top as they always do, lol.

I can now conclude with greater confidence that Bitcoin should bottom within 24 hours between $7.2k$7.45k. The 100 WMA is also at ~$7.2k. Ethereum will likely bottom $169 and Litecoin $43.

I’m not just basing that on the cyan colored support line on the chart above. A confluence of lines on my recent charts all confirm those numbers. Those are also the bottom of the descending broadening wedge which I wrote about in my prior blog.

Note what I added to this blog above, which I will quote again as follows:

I’m expecting the superimposition of a tweening of a prior fractal similar visually to the following:


(click to embiggen)


Disclaimer: This is for your entertainment, not financial planning nor legal advice. Consult your own professional (perhaps licensed) adviser. I’m not responsible for any decisions you make after reading this post.