Bitcoin 12 November 2018

The little bounce happened as I said it would yesterday

This is a good sign, it means everything is proceeding as normal.

What is normal?

Normal in such circumstances is a set of decreasing highs and of gradually increasing lows. These occur over ever decreasing time periods. At the present time they have reached such a small trading range that BTC is still being mocked for its lack of volatility and for its consistency. This is despite recent large movements in stock markets. Overall I regard it as very positive that the performance of BTC is becoming so independent of that of stock markets.

BTC can be said to be moving, for all intents and purposes, in a sideways direction. The reality is that it is trading in a small and ever decreasing range. The latest chart shows it trading within a range that is itself within a range. Specifically: it's now trading between the short-term 0.382 and 0.5 Fib levels as seen on the chart below.

As I remarked yesterday:

I doubt BTC will drop lower in this wave and I think it will break through the 0.382 level (roughly $6330) within the next few hours.

BTC quickly broke through the 0.382 resistance shortly after I wrote that, and is now using it as weak support (which did hold earlier today).

Lower highs and higher lows

As you can see below, the trading range of each consecutive wave is getting smaller and smaller. This is nothing new. The remarkable part is just how very small this range now is. We are firmly in "sideways" territory with such diminutive price movements.

If the above chart did not drive the point home enough (it was a log chart), just look at this linear chart below. The effect is even more pronounced:

Looking further

In the long-term I still expect BTC to stay within the broader ranges as indicated by the long-term trendlines on this chart. For the medium and short-term futures I expect it to follow something along the lines of the blue arrow.

This is not cast in stone as the trendlines are a little open to interpretation, especially the lower one (which has an effect on when BTC becomes bullish again). Were I to start the base of my support (the red one below the candles) slightly higher up, it could delay the return of the bull market by perhaps three months. I wish I could say for sure what will happen, but at this stage I can't. I just show you what I consider to be most likely scenario, while admitting to the limitations that I am working with.

Footnote

In other news I'm sad to see my beloved CargoX drop out of the "Top Gainers" of CMC again (as discussed yesterday), but I have no doubt that it shall return soon enough. I see that WAX dropped out along with it.

All charts made by Bit Brain with TradingView

Yours in crypto,
Bit Brain

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by Bit Brain

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