12/6/2017 The Market View and Trading Outlook
Bulls 1, Bears 0,
Bitcoin made an impressive run starting at 6 p.m. EST yesterday using the $11,500-$11,600 area as support. Over the past few days the $11,500 area was tested on numerous occasions and held its ground. The longer it held the more positive price divergence was shed off on the MACD leading to a negative crossover as it traded in a tight range bouncing around in the low $11,000 range, price continued to hold and another crossover formed this time to the upside around 7 p.m. that kicked this thing off and Bitcoin up 8 percent as of this writing. That said in looking at the 12 hour timeframe and my previous analysis I noted there was little divergence there and we were likely to see a run up.
Basically we will need to hold these higher levels and really build some solid support for me to gain the requisite faith to start throwing large sums of money at this thing. In the SHORTER time frame we have just had a negative crossover which indicates there may be a minor pullback to the $12,100-$12,300 range before making another push toward the $12,800 high. This is also indicated by the 2 hour and 4 hour time frames as well. Fibonacci retracement puts a 50 percent retracement at $12,202, typically I add a buy slightly above so I would cautiously look at $12,275-$12,375. Short term BTC is tradable, if you are looking for $12,200 buys and $12,600 or better sells. It’s not at a point where I would feel good buying to HODL. It is at a point where I would buy to snipe in an out on the shorter time frames in order to protect my capital and minimize risk.
My longer term view remains unchanged:
Potential double top reversal. Volumes have remained low during the rallies to the upside followed by high volume sell-offs. High volume price retreats are indicative of lack of faith and usually precede a correction. Although bitcoin's price is ascending on higher lows, the RSI is losing momentum which is also indicative of a potential pullback.
The 1 day, weekly, 3 day and weekly are all well overbought. Adopting a contrarian view to my on Bearishness I decided to plot the MACD divergence between the MACD and the signal line on the 3 day chart prior to each crash and the results are interesting:
558
470 (.84) $3,000 --> $1700
1325
1164 (.87) $5000 --> $3000
1992
1715 (.86) $7500 --> $5400
3406
4203 (.81) $ 12800 --> ?????? (Where we are now)
In simpler terms we are in new uncharted territory with the divergence between the two being greater than it has ever been. The further the two get away from each other, the greater the pull to come back again to a point of balance. Think of it as stretching a rubber band. When that happens there will be a considerable amount of momentum to the downside as BTC will look for support at longer term moving averages. That said divergence is like a rubber band in another aspect as well; the longer it is stretched the more it begins to breakdown and lose its ability snap back to its previous shape. If Bitcoin is able to hold these higher price points for an extended period of time then the divergence within the charts will slowly disappear and these price points will stick.
There is a considerable amount of hype surrounding the entry of the futures market in 4 days, whether that is good or bad remains uncertain. What can be guaranteed will be a period of extreme volatility as the bigger bears and bigger bulls come to the table and begin playing with price.
https://cointelegraph.com/news/cmes-bitcoin-futures-market-could-give-teeth-to-bitcoin-bears
Etherium @ $451
As does typically happen when Bitcoin makes a large upwards move the money is pulled from other currencies and placed into Bitcoin so as to ride the upwards wave. This explains the down move in Etherium price over the last 24-48 hours. What I expect to happen, if Bitcoin continues the upwards push then expect a corresponding period of consolidation in Etherum price throughout the $430-$450 area. At which point, providing Bitcoin price stabilizes, cools and begins trading sideways, then expect an explosion upwards in Etherium price with a ceiling in the $500’s somewhere. Charts are saying that $430-$440 are major support levels and will serve to be a decent buy point. The most likely next move will be a major one to the upside after a few more days of consolidation. Again this is dependent upon Bitcoin holding its ground and cementing its position in the high to mid $12,000 range; if Bitcoin goes down it will take the rest of the Market with it. I would see these lower support levels as a decent buy point with tight stops. We may even see a touch an go at the $400 level, as it seem sas if $400 is the new $200 for those that have been trading Etherium the last 6 months.
LiteCoin @ $102
Same story as Etherium, when Bitcoin makes a large upwards move the money is pulled from other currencies and placed into Bitcoin so as to ride the upwards wave. Litcoin seems to have fared a bit better than Etherium in terms of having money pulled from it and placed into Bitcoin. As for the charts they seem to contradict themselves. The 1 day MACD is showing significant cooling with Litecoin in the well overbought zone. The last time the 1 day really trended south was the $97 to $37 drop, which was actually shaping up to be a normal pullback into the $70’s before the “Great Bitcoin China crisis” threw the entire market out of whack. Short term I will look for range trading opportunities between $98 and $104. It seems to be holding this level just fine and has not really taken a nose dive despite it being in a sellers period on the 12 hour time frame. Litecoin has a tendency to have long periods of consolidation that may last days or a couple weeks before making a move upwards. Depending upon Bitcoin prices I would trade in this area and look for a longer term hold if I can grab some in the mid 90’s.
**Addition I forgot to add this earlier, but as BTC acts like a vacuum sucking the money out of ETH and LTC, on the way up it can act like a hammer when it comes back down. Smaller traders that were confused by the price drop in these two while BTC was going up get scared when BTC turns the corner and start trying to beat the market and initiate sells that will artificially push the price down lower than it should be. This is usually accompanied by some real big buys at the low end of the range and large upwards swings.
My previous analysis:
https://steemit.com/bitcoin/@pawsdog/12-5-2017-the-market-view-and-trading-outlook
https://steemit.com/bitcoin/@pawsdog/12-4-2017-the-market-view-and-trading-outlook
https://steemit.com/bitcoin/@pawsdog/12-3-2017-the-market-view-and-trading-outlook
https://steemit.com/bitcoin/@pawsdog/12-2-2017-the-market-view-and-trading-outlook
https://steemit.com/bitcoin/@pawsdog/12-1-2017-the-market-view-and-trading-outlook
What do we do when we use logic and rational to make decisions, and something totally different happens. Like the rise in the stock market over the last several years, or the tenacity of the central banks. If you go back to archived files, you can read the same timing warnings in 2013, that are being used and published today. The old adage " don't confuse me with the facts" is gaining my respect. Thank you so much for trying to decipher and report.
True, but we are still only on a 1 day run up that started on 11/12/17 without a pullback. Fibonacci at 50 puts us in 9800 range just on the 1 day. I can bet you my entire wallet on here, $20.00 worth, that we will see a pullback and correction. I'm not to worried about it and am fairly certain that I will be able to pick up BTC in the 10k range again before to long. If everybody is on one side of the trade then there is nobody on the other and we have no market. What I could loosely assume is happening is a large push up by the same crowd that may short it into the dirt when the futures market comes online. At current there is no real way to "short Bitcoin" in an appreciable amount. Sure some exchanges offer it but the liquidity compared to the overall market is nill. The addition of futures is going to change that considerably. Moreover and what I think will be good for BTC is that the mound of capital in the futures market may wrestle control away from the illustrious "spoofy" crowd that is known to manipulate price. As more and more money comes in the overall pot becomes diluted and price will be able to stabilize. Large banks and hedge funds are not about the volatility aspect and will use money to smooth it out. That said I am not overly worried about the price right now. We have still yet to have a 1 day MACD/Signal crossover. Even the dip to $8800 last week failed to accomplish the goal of bringing things into balance. I'm seeing the possibility of a 60 percent or better pullback when the 1 week actually crosses over and heads bearish. Now is a great time to trade based on the 2 and 4 hour time frames. I'm still not going to HODL until we clear the 3 day or 1 week correction; which will happen it always does.
I don't have the guts to trade on 2 and 4 hour watch, but if there is a possibility of a 60 percent pullback, I'll keep some powder dry. By the way, this is the most content and sincerely written reply I have ever received and I appreciate it. Not just for the well constructed advice, also validates me as a real person. Thank you.
You are a people to me. :)
Hahahaha.
I would keep some cash in reserve, like I said what you are seeing with Etherium and Litcoin now is the money being sucked out as everybody is transferring over to jump on the Bitcoin train. Look for a jump up in either of those as bigger money starts moving back over, this will signal in most cases a drop on the horizon for BTC. You can see it if you watch all the charts, you will see a $1,000,000 sell on LTC or ETC followed seconds later by and = buy in BTC. Pretty standard affair really and something I like to see as I trade well with ETH and LTC. So I am happy to see BTC pull the money out of them. I just really want to see BTC trade sideways for a few as LTC and ETH will rocket up..
In 100 LTC at $99
In another 100 at $98.50
My payday is on Friday and I'm hoping this trend keeps pulling money out of ETH and LTC so I can grab either of those more cheaply. Really exciting times as BTC nears $14k.
I agree, but when Bitcoin does come crashing down and it will. It's going to hit Etherium and LiteCoin like Odins Hammer. Its kinda unfair, BTC goes up fast, LTC & ETH go down, BTC goes down fast, LTC & ETH follow.. it's like they get fucked twice.. lol. they do best when BTC is stable and money pulls out of BTC and sees them as a bargain.. I would honestly not be surprised to see LTC in the $60's if BTC goes boom. I think $76 is the short term floor as we saw last week.. no matter what happens we know there will be a fight there and some rebound action. Again, just keep in perspective HOW FUCKING FAST BTC, ran down to $8400, it was like an hour or something... wiping out the gains of a week and a half. I can't really say where a truly safe floor is if it can blast through the order book like that.
It's knocking on the door of $15k now... it's surging through $1000 worth of price action within a day now. Total Market Cap is over $400B and BTC has got 61% dominance of the cryto market. It's pretty incredible. I honestly have no idea where this money is coming from, I guess everyone is expecting the Futures market to add a lot in.
I honestly don't mind Odin's hammer decimating everything in the short term if it helps build support for the long term... and further buy opportunities is exciting.
I agree.. You know, I have been watching these charts everyday for a year or so. Trading actively throughout. What is occurring now is just not natural.
Look at the time required to make price jumps.
$0000 - $1000: 1789 days
$5000- $6000: 8 days
$6000- $7000: 13 days
$7000- $8000: 14 days
$8000- $9000: 9 days
$9000-$10000: 2 days
$10000-$11000: 1 day
$11000-$12000: 6 days
$12,000-$13,000: 17 hours
$13,000-$14,000: 3 hours
It seems like a perfect setup for the Bears in the futures market to come in and piss in the Kool-Aid every one had been drinking recently. We shall see.
I can see it going higher based on its ability to fight off large sell order now; I'm not going all bull, but I'm seeing a higher push if it makes it through the next 6 hour time frame without much downside. I'm fine on LTC right now anyway, been in and out 3 times between 98-101..
I'm waiting for this..
Hahaha, that's amazing. I've got 30% of my portfolio in BTC and it won't surprise me tomorrow if I wake up and it's the exact same, or zero or $40k. I just know it'll be entertaining.
If there is a Nuclear Explosion of BTC, and LTC and ETH cop it as well... will that decimate the cryptocurrency market? Or will everyone just immediately put buy their way back in? I guess unprecedented market action means we can only speculate.
That I don't know, as the little fish get eaten by the big fish eventually we run out of little fish. We are no where close now, and even if BTC did go nuclear people will jump back in. It will take a prolonged bear market where the pain lasts to take it down in that aspect. I would expect the technology or some outside factor like banks and government to take it down before it has a chance to break down naturally.
That's true... I literally don't know anyone that has money in the stock market these days. It's all property (which has been going nuts for 20 years in Australia) and now maybe Crypto. I only know little fish.