12/19/2017 The Market View and Trading Outlook

Panic, Panic, Bitcoin crashing, doom and gloom, this is the end. The rapture is upon us.. Lol.. That is the basic synopsis of the headlines I read this morning as BTC dropped another 5% during the early morning hours. Bitcoin now sits at $17250-ish down 14% from its all time high of around $19,800 which is perfectly fine and totally in line with what the charts have been telling us. If you read my analysis two days ago I predicted a drop to around $18,000 before rounding the corner which was in the process of occurring. I also predicted the ALTS ETH and LTC would take off yesterday which they did, so your money should have been on those two as mine was. What I did not predict was the drop last night as I did not write a report yesterday. Even if I would of taken the time to write as opposed to trading I’m not totally sure I would of foreseen the drop in BTC last night. That said it would not of mattered to me anyway as my money was not in BTC it was in ETH @$620 and LTC @$267; having bought and sold a few times throughout the various highs and lows.

So where do we sit now and what is occurring? Basically as I have stated in numerous analysis over the last month “money cannot be in two places at one time” and “people are greedy assholes”. That said when ETH, LTC, XRP etc. began posting 10,20,50+ percent gains, while BTC price action had all the excitement of watching paint dry, people switched to the Alt coins. As a result they sold out of BTC and bought into the Alt coins. The ensuing selling action of BTC brought the price down and the transfer of money to the Alts shot their price up. Everyone wants to be on the winning team and part of whatever is posting gains. There is no loyalty in the cryptocurrency market and infidelity runs rampant. This, however; is a double edged sword and there is a very fine balancing act to be maintained as too much selling action on BTC brings about market crash fears and everyone begins to sell out of everything.

If you are a chart junky like myself you would have had opportunity to see this balancing action in full effect yesterday as LTC and ETH took turns going up with the 15 minute charts directly opposite of each other. LTC would run up, stall, pull back, then ETH would run up, stall, pull back, then LTC etc. This entire process was simply the result of people such as myself and those with a lot of money jumping from one raft to the other with their money. Think of it like an hour glass, the amount of sand (money) in the hour glass never changes, but it can change sides depending upon how you turn it, flowing from one side to the other and back again.

Moving on.. What is about to occur? Well that depends on a few factors, mostly what happens in the ALT coin market, when big money decides to step in to prop BTC and what the indicators are telling us. Let us start with the Alt coin market, basically ALTS are going to need to stall out and pull back if we want investors/speculators to lose interest and put their money back on BTC. If that fails to occur BTC will fall too and beyond support levels that will bring about fears of a market crash and summarily bring us all down in a big way. It is a very fine balancing act for BTC to pull back just enough, but not too much so as people switch over and pump Alts, but don’t let ALTS gain too much too fast so that they pull too much out of BTC and crash the price which inevitably crashes all the prices. Basically right now we are walking on the razors edge waiting to see what happens as BTC could go either way.
A good explanation can be found here:

https://www.coindesk.com/bitcoin-risks-bearish-price-reversal-as-altcoins-surge/
https://www.coindesk.com/20k-bitcoin-not-yet-changing-charts-favor-crypto-rivals/

Moving onto the issue of big money, let me dispel any misconceptions you have about BTC price being controlled by the little guy; it’s not. If you watch the charts as diligently as I do you begin to notice things after a while, you notice massive buys at the wrong times, or right times depending upon your motives. In saying that some of these massive buys occur at the wrong time, I am referring to the fact that they occur at a time when the charts and indicators show us slipping into a bearish market or deep slide; at a time when sitting on the sidelines with your money is the actually the best bet. These buys occur at times when without them the price of BTC would slip and slip fast causing a massive sell off. Its never to much, but just enough to ignite some interest and get the smaller investor/speculators to jump in and push the price back up and start an unsustainable rally. Examples would be the 400 BTC buy that started the rally from $13,000 to $17,000, the 600 BTC buy that started the rally from $17,100 to $19,800 etc. These large moves will always be followed with an even larger sell at the peak as big money takes their rally fuel out and reloads it for when needed next.

In this most recent dip to $17,100 I have not seen the big buy yet, as such I have a sneaking suspicion we may correct further into the $16,000 range or lower. This would coincide with the currently bearish views of the futures market. That said Big Money is not going to let is crash into the dirt as they have entirely too much to lose. That is not to say that they won’t let you think that its sinking fast in order to entice sells for them to pick up discounted BTC.

Looking at the charts I have to change my bullish view to a more undecided one. The 1 day chart just went crimson for the first time since $7800 on November 23rd, however; it has done so in an oversold condition according to the StochRSI, which traditionally means we are consolidating toward another large push up which would be in line with my analysis 4 days ago. I have to compare this venture into the 1 day red with the one on from November 4th-11th which occurred while the Stoch RSI had us overbought and resulted in a slide from $7899 down to $5810 until entering oversold territory on the 9th. While at current BTC prices of $17,000+ that seems like nothing, it still amounted to a 27 percent decline in 5 days. A similar drop now would put us around $14,400.

In the event we began heading in the direction of the low $14,000's panic selling and momentum will likely take us and the rest of the market down much further into the $10,000 range. Comparing the two time frames and choosing the most likely scenario based upon what it has done in the past, I will take a very bearish for the time being and move to FIAT, once we hit bottom below $11,000 and I see a big buy. This view being based upon how BTC reacted previously when the charts were essentially the same as they are now. I am expecting some sideways trading, price action treading water, another few solid drops to a scary low and then most likely a trend upwards in the coming week or so.

Volume on the 1 day shows selling, but nothing extreme as of yet. If it continues to post day over day declines expect one day of huge selling with volume of 80,000+, after this occurs you can most likely be sure that the bottom is near and it is time to buy. I’m just going to cautiously play the shorter term trends at the moment as we are walking on the knifes edge with somewhat mixed indicators as to what lies around the corner.

ETH @ $832

Trade not a buy, as I stated with my analysis of BTC we are walking on the edge at the moment and there is no loyalty in the cryto market. If BTC begins to take off people are going to sell out of ETH and buy BTC, if BTC takes a nose dive, people are going to panic sell ETH and go FIAT till the storm passes. I would guess the floor for ETH is around $580-$640 right now. If it makes it down there again I will look at buying. If it consolidates for a prolonged period of time in the $780-$820 range I may look at a buy there. What the price will do just depends on to many outside factors for me to make a decisive prediction one way or the other. So I say trade the shorter frames if you have the experience and be ready to go full Fiat on a moment’s notice.

LTC @ $340

I have a long history with LTC we have been dating since the teens and really got hot and heavy in the $40’s. That said LTC is an odd coin at times, it for the most part is a decent store of value and absorbs market hits better than most. It digs itself into a price point and just stays there regardless of what is occurring, we saw this in the $40-$50 range and again around $80-$100. Now that said, we are in uncharted territory at the moment having just run up 200 percent the last couple weeks. $250-$300 seems to have rock solid support and should serve as a solid bottom in all, but the most severe of BTC corrections. In the event BTC does go south and in a big way, go fiat and see what happens. See if the $250-$300 holds. If it fails, do not play pick the bottom as it may be in the low to mid $100’s at that point; this being worst case scenario.

This again to me is a trade, not a HODL at current price and market conditions. While we did not break a new high like ETH yesterday, I don’t expect to in the short term as the market is uncertain. Most likely LTC is going to pick a price between $275 and $350 and consolidate there for a prolonged period of time, days, weeks, etc. Consider its behavior after its run from $40 to a high of $97 a month ago, then back down to $60-$70 where it spent the rest of the month basically trading flat. I will hold a small core position from the mid $200’s with a stop around $330 (almost got me this a.m. : ) and trade the trends beyond that…

Previous Analysis:

https://steemit.com/bitcoin/@pawsdog/12-17-2017-the-market-view-and-trading-outlook

https://steemit.com/bitcoin/@pawsdog/12-15-2017-the-market-view-and-trading-outlook

https://steemit.com/bitcoin/@pawsdog/12-12-2017-the-market-view-and-trading-outlook

https://steemit.com/bitcoin/@pawsdog/12-11-2017-the-market-view-and-trading-outlook

https://steemit.com/bitcoin/@pawsdog/5ceniq-12-9-2017-the-market-view-and-trading-outlook

https://steemit.com/bitcoin/@pawsdog/12-9-2017-the-market-view-and-trading-outlook