Bitcoin Looks Bearish! Bitcoin Looks Bullish! It's Time To Do Nothing

Sometimes less is more. The desire for control is impossible to extinguish, but relinquishing control in an unpredictable scenario is sometimes the optimal path to simultaneously avoiding disaster and maximizing happiness.

Technicals = Bearish

All of the technical analysis I do on Bitcoin price is bearish.

• the EMAs went from positive sloping and under the price, to flat and equal to the price, to downward sloping and above the price.
• there was some soft support in the 3800-3850 range that was tested a couple times and was finally broken last night and price plummeted to $3600 before rising back up.
• although the volume was initially strong on the pullback, it hasn't been extraordinary towards the end to believe a bullish revival.
• BTC broke through 4000, but it hasn't surged through like it should if it was a real breakthrough

Finally, there was just about exactly a 50% fib retracement on the price from the high to the low:

All the technicals point towards the recent price retracement to 4k being a standard pullback and the real bearish period is yet to come.

Logic = Bullish

Within the next 3 hours there is going to be a difficulty readjustment on BCH which may increase the blocktime by a large factor. Further, with segwit activation in the next few days, hash power may flow from BCH back into BTC which might drive the demand and price upwards while pushing the price of BCH down.

Manipulation = ??

BCH miners have been manipulating the block time by pushing mining power in and out of BCH for the last 3 weeks. They have also timed pumping it and dumping it on exchanges. There are also rumors that Roger Ver is bribing mining pools to dedicate more hash power to BCH.

What should we do?

At first I was only paying attention to the technicals and trying to sell BTC for USD or tether and waiting for a lower spot to rebuy when the price stabilized. Meanwhile I was making sure I had at least as many BCH as I did BTC in case the price of that was overpumped.

All in all, I've been trying to do way too much with an unpredictable and manipulated market.

This article on how to approach forks is an excellent guide of how we should be acting right now.

A fork should not be something for an investor to get worked up about. An investor is automatically diversified on both chains. There is conflict, but it does not need to be his conflict. Eventually one chain will dominate. As long as he takes no action, he doesn’t have to worry which it will be. He can let them fight until one of them kills the other, knowing that he will always have the same fraction of the total.
The investor can gain by choosing correctly but he must also take on risk. He can never know for certain who will win, so he should never go all in on one side. To the extent that he doesn’t pick sides, his investment is secure. Maybe he will choose correctly this time, but Bitcoin forks can happen at any time, so this sort of conflict will happen again and again. If he keeps choosing sides, he will eventually make too many wrong choices. An investor must remain unharmed through all of them if he wants to be immortal. He is safely immortal as long as he does not take sides.

Not only have I been tampering with my investments and playing way bigger than I'm comfortable doing based on the number of bitcoin I have, but I've prevented myself from being productive outside of watching the charts.

Constantly watching the price is debilitating, especially when I have no idea what I'm even rooting for. I still own a lot of bitcoins, but I also sold a bunch hoping to rebuy lower. Instead of reading, learning, studying, or bettering myself, I am frozen in place, watching the charts go up and down, wondering if I made a mistake trying to predict the unpredictable.

That's not to say technical analysis has no place in investing/trading or that I shouldn't trust in my ability to reason with it in the future. I just think this particular scenario is so unique with so many outside factors in place, that trying to make high stakes decisions with imperfect information is not only possibly detrimental financially, but the debilitation it causes is enough of a downside that I should avoid it altogether.

It's time to stop watching the charts, equalize my BCH/BTC holdings, and go long on a technology we all believe in rather than try to micromanage my holdings and perhaps increase my number of Bitcoins by X% by selling some high and buying more back lower.

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My name is Ryan Daut and I'd love to have you as a follower. Click here to go to my page, then click in the upper right corner if you would like to see my blogs and articles regularly.

I am a professional gambler, and my interests include poker, fantasy sports, football, basketball, MMA, health and fitness, rock climbing, mathematics, astrophysics, cryptocurrency, and computer gaming.