Bitcoin Analysis - July 24, 2018 - BTC ETF Decisions in August and September
One of the keys to doing anything well in investing or trading, is understanding the movement of things. There is a dance in crypto, and sometimes we do not know the ultimate choices the market will make, but we have a good idea of the dance it will take arrive at any of the possible outcomes. First, let us look at the current rally:
Green: Leg 1 of 3-phase rally
Blue: Leg 2 of 3-phase rally
Red: Leg 3 of 3-phase rally.
On these rallies, you want to sell at the top of phase 2 or phase 3 if you are nimbly moving with the market.
This also means, I expect a 3rd phase to the current BTC rally up to 8,500 USD. Before the 3rd-phase occurs, the 2nd phase has a solid pull-back / stall.
Going forward, normally I would just look at the dance of the market. However, the raw technical analysis going forward has been impacted by a major foreseeable event impacting BTC in August & September 2018. The event could be highly positive for Bitcoin, and it could also be short-term negative. I am speaking of the ETF decisions.
Fundamental News Affecting Bitcoin in August and September - EFT Decisions for Bitcoin
News is out today that some ETF decisions for BTC have been moved to September. These five ETF decisions were all submitted by Direxion, and they are different from the COBE Global Markets ETF decision which are expected in August.
The most likely one to succeed is the CBOE Global Markets proposal, which has a hefty insurance policy, and is also tied to the CBOE. The CBOE being involved in the ETF makes it ten times more credible than previous ETF decisions, in my viewpoint.
The Impact of ETF Decisions
As long as the major CBOE ETF decision for Bitcoin remains unresolved by the SEC, the Bitcoin market is unlikely to tank below 7,200 USD. This also creates a "wait and see" mentality for the market while prices hold.
Price Behavior for BTC Going Forward
This is a predictive model I use when I believe price could swing in multiple behaviors going forward. We just look at the different ways BTC could swing, while meshing in the near-term fundamentals which support price into the August decision:
What we have to understand about the CBOE ETF approval is that if it is not approved, then the September ETF's for Bitcoin will also most likely not be approved. I would give it 90%+ odds that the CBOE ETF decline is an indicator for the rest. The market, though, is often not that smart.
The market might still hold out hope for the September ETF approvals if the CBOE ETF is rejected. In which case, we might see some price support going into September (marked by the "Likely" red line). Yet if the market is behaving sane, and the CBOE ETF is rejected, then a sane market might assume the other ones are rejected too. In which case the market might behave rational and move down to 6k quickly (marked by "Unlikely" red line).
CONCLUSION
- Swing traders should sell at the 2nd leg (today) or the 3rd leg (in coming days/weeks) of this rally.
- When there is a pull-back from the 3rd leg of this rally, down into the 7,500 range. This is not a buying opportunity, unless the SEC approves the CBOE ETF. At which point this is a gamble, unless you have insight into the likelihood of approval. (If so, please tell me your reasoning.)
- Any sort of price support around the 7,500 range, is not a sign of support for a continued bull market. People who only read technical analysis might think this. Rather, it is a sign of "wait and see" concerning the CBOE ETF decision. If this support holds following the CBOE decision, then it is still just a "wait and see" situation concerning the other ETF's in September.
- A market disappointed by no ETF approvals, is likely to decline back down to some baseline of support. Very likely to test the 6k level to see if it holds.
... but keep in mind it may be approved, which would be great!
Published on
by crypto-investor
the 3rd is nearing the 200 MA too when btc test it 2nd time, await the news from CBOE ETF.
well just hoping after waiting for so much long this don't take too much time now atleast
Great analysis mate. How do you think alts will behave over the next couple of months?
Depends on the alt. They're still ultimately a function of BTC, but some do better than others when BTC rallies. I think many of the alts have bottomed so long as BTC doesn't do a continued bear market.
What I mean is we have seen mostly at the start of this year alts generally moving with the direction of BTC. But with the recent run up in BTC, we have seen alts generally going down as was the case late last year with the BTC bull run. And we all know what happened in December when the money flowed from BTC into alts. Do you think this is likely to happen again or will alts still be generally correlated with BTC still?
Assume history will repeat until proven otherwise.
When BTC bull runs again, I expect BTC to run first and then the alts to lag and eventually if BTC does well, it eventually flows back into the alts.
The reason they were crashing in-tandem this year and rallying in-tandem was mainly because it was a bear market. If BTC tanks, then people know the alt will tank, they dump their alt into BTC, dump BTC too. But usually in a crash, the alts would always get hit worse, because money was flowing out the alts first, and then into BTC, and then into USD.
If BTC begins to run in a real bull market, most alts wont run that well just like in 2017... until BTC runs enough that the market favors re-balancing into the alts, in which case alts would do great. There's not panic in a bull market, and the bull market can't run unless BTC runs... so it has to hit BTC first. Even in this latest BTC move, a lot of the alts have not kept pace.
last december $20k BTC with no ETF... We now have potentially trillions more looking at this market ready to invest. I don't think the ETF is as make-or-break as you make it seem. BTC heading to new all time highs because it's very limited available and insane amount of money flowing into it. With or without the ETF which is basically a distraction at this point.
If the declines from a BTC ETF rejection find a support level and hold it, cool. Then it's like BTC 7k or something instead of 6k. It would be bullish.
Don't be confused, I'm long-term bullish on BTC, just that if the ETF's are not approved, I am unsure that capitulation for BTC has ended. https://steemit.com/btc/@crypto-investor/btc-market-analysis-july-12-2018
Awesome post.
@crypto-investor It seems like Bitcoin can repeat as of year 2017. and If ETF get approved then it will be biggest move of the history.
Yes, if the EFT is approved, the article I found said the ETF would go live in Q1 2019. This would mean a bull rally until 2019.
Although it's hard to follow, only because Im a total newbie and Im just finding my way now, I can see what youre trying to get at and I think the more I look at your graphs the more I get it.
Thank you for sharing this. I'll be studying your post today as part of my crypto education.
Hey, good to speak with you again!
Just my tip for a newer person to investing or trading. Figure out your time frame for doing things. If you are going to buy something and then sell it, it makes a big difference in how you strategize if you are buying and selling short-term (less than 2 months), or if you are holding for 6 months or more.
Day Trading Crypto people seem to buy and sell on timeframes of 1 week or less.
Swing Trading Crypto people seem to do it for perhaps up to a month or two.
Investing Crypto people need to focus on long-term lows and long-term highs... like the high at the end of 2017, vs. the presumed low we are seeing nowdays. Strategies are usually phasing in and out of positions along the way.
Bitcoin is approaching another resistance level of $8,600, with the momentum price is carrying i believe price will push straight through this and continue this positive movement. After this level we could see price stall slightly around the $9,000 range. I still believe we could still see more downside until the $10,000 level is broken, when this is broken is when the bull run will commence.
I could do with a continuation of this 2nd leg here. :D I got a swing trade going in an altcoin and I'm waiting for the exit point. Higher BTC goes, the better it is for what I'm doing.
Im in a similar position my friend! I hope your trade pays off for you! I have followed your account and cant wait to connect with you again!
Great info, my personal opinion is that given the size of the market it will continue to act irrationally. We have yet to see the flood of institutional money, which would have a stabilizing effect on price movements and lead to more rationality. In short im betting on bull no matter the outcome.
the market price of bitcoin is increasing day by day,,,its a good news for us