Despite market optimism I still don't think we bottomed 📉🤔
The sentiment in the crypto markets has shifted and with positive news all around an increasing number of people are declaring that we have bottomed out at $5800. I'm still not convinced that is the case, and while we are certainly looking bullish in the short term I remain bearish in the medium term.
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Positive news
After months of negativity recently there has been a surge in positive news regarding cryptocurrency. Whether it's the announcements of new ETF initiatives, or the positive reports by governmental organizations such as the G20, the American SEC, the EU Parliament or China re-entering the fray, to well-known figures in the space like Mike Novogratz flat-out calling the bottom, good news seems to be easy to find these days.
It doesn't end there by a long-shot. Bitcoin futures are up almost 100%, then there's Coinbase creating a political action lobby group, and stock exchanges looking to add crypto tokens to their platforms. There's just so much good news that it's getting to be too much to even list it all.
It's easy to feel the FOMO.
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An optimist would call me a pessimist
I've often written about my crypto-PTSD that I have incurred after the 2014 crash and subsequent bear market, and I admit that I am of the more pessimistic kind of investors out there. I don't think we have hit the true bottom yet. It's just that I have been through such a market cycle before and it feels to me like we're going to go through one major dead cat bounce, in order to truly break everyone's spirits and shake the last remaining people out of the market.Let me pull up the 2014 bubble & crash charts again.
The one thing I'm still waiting on is that big hump on the chart which I outlined with the circle where we break the downtrend, then make another attempt at a bull-run which fails at about 50% of the all-time-high. If you look closely at the chart, you will see some similarities to today's Bitcoin chart. Most notably the apparant 'bottom' and the apparant breaking of the down-trend.
Let me pull up the current chart for comparison.
There are some differences in the chart but the overall shapes seem comparable. As you can see, I have drawn out a pathway which I estimate that Bitcoin's price chart may follow in this current short-term bull market. If we take the previous bubble chart as an indicator, the 'hump' we may be going through will reach up to about the last lower-high from the previous down-trend. In 2014 this was $750, or almost double the then-assumed bottom at $350.
If we apply those numbers roughly to the current chart of Bitcoin that would bring the top of the upcoming bull attempt at about $10K. After failing to break 10K, if we follow the same path as 2014, we could slowly dwindle back down to about 50% of the previously assumed bottom - which would put the true bottom at about $3000.
A dead cat bounce..
If this plays out it probably won't be a quick process, just like last time. Back in 2014 the dead cat bounce took about 3 months, starting at the end of May and ending at the beginning of September. Right now we are in July, which puts us a little bit off in terms of timing but it could indicate a bounce all the way up until October-November before it starts to break down.
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The Psychology
People talk about charts and market cycles, but what the charts really display are market psychology. The price is merely the result of that psychology. So when you're predicting the market, you're actually in a way predicting psychological human behaviour. A market cycle therefore isn't so much a cycle in price, but rather a cycle in investor psychology. It's not for nothing that we are all too familiar with the (in)famous 'market psychology bubble chart', of which many analysts will tell you we have passed the 'capitulation' and 'despair' phases.I don't think we've felt true desparation at all yet. Today's despair is nothing like the hunger-winter of last time. Sure, we've felt 'fear', I'll grant you that. But true capitulation is the moment when it turns out that what appeared to be the next bull-run, is actually a failure, and the last chance for everybody to get out before it all turns to hell.
Despair is what happens when Bitcoin is dead. Capitulation is what happens because Bitcoin has failed. How does it fail? By going on a bull-run right now, and getting everybody's hopes up only to massively disappoint and slowly but surely utterly drain every market participant of their energy and enthusiasm. It will be the last and final slow but steady shake-out of all fortune-seekers from the market. All of this has happened before, and all of this will happen again. *
*At least, I think it might, but I couldn't make the BSG reference if I nuanced it!
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False optimism
I think the positive sentiment is a matter of false hope too. At least, in the short term. A lot of the positive sentiment is currently fueled by the possibility of proper regulations or the entrance of institutional money into the space, and while these are amazing developments I also realize that these things take a lot of time. Even in the most positive scenario where ETF's are granted the go-ahead and governments regulate positively these things are not going to happen overnight. Institutions and lawmakers are notorious for moving slowly and despite positive advancements it could very well take another year before we actually get anywhere.![](https://steemitimages.com/640x0/https://cdn.steemitimages.com/DQmTdTogEsBP64wtTZD38triu4bHkmhUaGgnSNLYPLPwg34/dividerline%20cartooney3.png)
Tone
And lastly when you dig through the amateur predictions and predictions of those who have only been in the space for a relatively short amount of time, you will eventually come across Tone Vays and his Bitcoin price predictions. I disagree on many things with Tone Vays, and don't particularly like him very much, but when it comes to the price of Bitcoin there are few with as much experience under their belt.
Tone Vays is one of the most well known, respected and controversial Bitcoin price analysts. He too predicts the price of Bitcoin to turn bullish in the short term, bearish in the medium term and bullish in the long term. This echoes my own feelings and predictions regarding the current market.
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Don't get me wrong - I want the price of Bitcoin to go up. I would love to be wrong. I don't want to go through desparation and capitulation at all. But I can't ignore the signs and my gut feeling on this. I daresay that anyone who thinks we have seen despair in the current market, probably hasn't been through the last crypto-winter.
I would be more positive if we had dropped below $5800 on this last dip. That would have indicated to me that we're on our way down to the true bottom. Now that we're going up again, I can only hope that it'll be over as soon as possible so we can actually start to bottom out. From the looks of it, it might even take as long as the better part of another year before we reach the true bottom - again, based on the previous bear market. That's when the real veteran HODLers are made.
Should we manage to break above $10K I may start to reconsider my analysis, but I won't be truly bullish on this run until we break $12K.
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I have the same feeling @pandorasbox.
1.- let's cross the $300bi TMC barrier
2.- Let btc cross the $8500
3.- Let's cross the $513bi TMC barrier
Obviously i wish this chart prediction is total wrong and we mooning soon :)
then we will be in a total bull run and we should start to think about when to take profits before bears took us "wanking" again ;)
And here I thought I was the only one using the "Colourful triangles" approach to rough TA! 😂 https://steemit.com/cryptocurrency/@bitbrain/the-bear-is-over-at-least-for-now
Colourful triangles team FTW haha
Yes that shows about the same movement as I'm expecting too.
And taking profits.. maybe..! I mainly just HODL it out.. picking the top is about as hard as picking the bottom, too risky to get shaken out one way or another.
I made the mistake last year to get out of BTC and jump into Alts when I expected us to top out at $7K but instead it went parabolic right after...
I hoping for pump...
I think we'll see some more in the short term! If I'm right, all the way up to 10K before we go down
I share same beliefs, i have stepped out and will step back in at 5K. Even with ETF approved, nothing will happen before 2019. Another thing to happen at 8.5K is the death cross, a ridiculous indicator but it will be played out to reach a new bottom. Just my 2c off course but you are not alone in your thinking :-)
Oh, I wouldn't dare to step out! I've learned long ago not to trade BTC anymore. Just HODL it and occassionally buy more... it's too valuable to risk losing my entire position in!
I may buy more though once/if we breach $5K
I looked at the charts while I was reading your post...and I think you might not be wrong about it possibly not being the bottom...but I think it's a mistake to use the previous action as a crystal ball. It's not exactly a horrible place to buy though, as long as you can manage to recognize when it's going back down, to sell before the dip, and buy back in. I don't think we can know for certain at this moment what the action is going to be though. We can guess based on previous action, but I wouldn't bet on it not being the low for absolute certain. Steem definately looks like it hasn't reached it's bottom yet, as far as Steem/BTC.
Most alts will probably go lower I think.
And I agree past results are no guarantee for the future, but the 2017-2018 period feels SO much like 2013-2014 it's scary. Down to almost the exact same emotions, logic, even the news reporting is the same. Sometimes it seems like the market has a really short memory. I wouldn't trust it so much, if it hadn't been this similar all this time.. but it has been.
It's not bad though.. because if history does repeat itself, then the future is very bright indeed after we go through the final dip :)
The fact that it's so similar might actually make it end up repeating itself just due to the number of traders that are looking at it. There is a real danger though because there actually is a chance that it was just a frenzy pump.
More people will buy into Bitcoin but the question is what the actual worth is for the number that want it? People always say that Bitcoin has no real worth, which is of course bullshit, but it's based on some reality. FIAT is based on countries and people have established metrics for it's value. No one has established metrics for the value of cryptos, yet. The value of BTC is based on hype and hope. Even at it's worse, it was actually better than Paypal for price when dealing with the movement of large amounts of funds, and it was faster and cheaper than a wire transfer.
All the people that bought Bitcoin when it was high and then listened to that HODL shit are probably crying right now. A lot got into crypto finally at the wrong time. Now they're holding bags that are worth less than half of what they started at. If they either actually do HODL, or trade smartly, or buy in more now that it's down, we're fine, but we might have alienated quite a few. There's a chance that it might not have a new high for a few years. Of course, I think that's a slim chance. :P
I think we're going to have a new low, then a new frenzy.
I agree.. and I do think some people who bought at the top are hurting real bad. And I also agree that some people have become alienated in a sense..
But this is exactly what the hype cycle requires.. the shaking out of all the weak hands. And I'm expecting this short-term bull run to be that shake-out moment.
Is it evil to hope some of the idiots that bought high, then sold way lower buy in again, after it gets the fever high pump, just in time for it to crash again?
Only a little bit :)
If the ETF gets approved, then I think the bottom is in. If not, then you may be right, and we could see some pretty big downward movement. Nice post.
I think the ETF approval could boost us up higher, up to 10K. But even if it is approved it is going to take months, if not a year, before the ETF actually starts trading real Bitcoin. During this year the 'crypto winter' could occur.
We have to keep in mind that ETF's also have managers in charge who are charged with the job of buying at the best price. ETF's benefit greatly if by the time they become active, the price is lower.
Interesting post and I agree with you that it is definitely not certain that we have seen the bottom. Or we might see a lot of sideways movement still, like when the Gold ETF was introduced:
I saw this chart come up on REddit too yes and the similarities are scary.
But even though I want to believe charts like this, by now I have seen so many chart comparisons that I am starting to wonder if these are in fact comparable or if we're all just staring at so many charts that it's inevitable we're starting to see similarities. On this one in particular the scale is so off.. in one case it's taken over a 30-40 year timespan, compared to Bitcoin's 8 year.
I sure hope it follows the gold price though.. it would put us at about the figures that most people are expecting. But after this boost everything is uncertain again, because the Bitcoin chart will start to get ahead of the gold chart....!
Nice article, I hope the bottom is in, but who knows
Thanks! It would be nice, but I remain skeptical!
I love to be wrong on this though
I think $9600 is foreseeable, but that is stretching in my disbelief - let's go cryptos
That is in line with my own thinking: up to about $10K, give or take. Then, historically at least, we should drop back down
I have to disagree with this one.
My reasoning is that your scaling is off. In both cases you are looking at 18 month charts. This is not correct as the size of the two hype cycles is not equal. The first one is approximately twice the size of the more recent one. You know this yourself, you've said on more than one occoasion that we've been through far worse, and you were right. The two highlighted blocks are not the same!![Screenshot_9.png](https://steemitimages.com/640x0/https://cdn.steemitimages.com/DQmWrcDmvwwbvuw9yayBY39xCvN7BggtpsFm8LHvRx91Jg9/Screenshot_9.png)
Solution: scale them the same and overlay: hey presto! All will be well! 😀 Luckily for you I psychically anticipated your post and so I wrote this one a day ago: https://steemit.com/cryptocurrency/@bitbrain/btc-long-term-pattern-analysis . It will show exactly what I mean. 😉
Yes, I saw your post and it's enticing and definitely a possibility but I remain very skeptical and am ready for the scenario I outlined in my post above.
It's not just about the patterns either. I mainly go off of the feeling I get from the market sentiment. I simply don't think the market emotions are correct yet. We haven't had capitulation yet.
As for the two highlighted blocks not being the same, yes that is correct - we're only about halfway through. The remainder of our current 'block' still needs to occur IMO, which is the hopefuly rally -> failure -> slow decline to definitive bottom. By this estimate, we are still many months off from reaching this definitive bottom. To me that makes sense, because it's going to take a while to truly dishearten everybody.
We will see though! Once we breach 8K the journey to 10K shouldn't be far off, which is the make-or-break level IMO
Ah, you and I are seeing this differently. That's great! When people all agree then nobody learns anything.
Okay, I see your arguments. My counter argument is that capitulation did happen and that the bear is over (I have a post about that too 😉).
It will be interesting to see which of us is more accurate with their predictions.
I would wish you luck, but that would be bad for me and worse for the markets! 😂
Hah no don't wish me luck! The opposite rather, I wish I would be wrong ;)
I am curious to know one thing though: When did you enter the crypto (investing) space? Have you joined in 2017 or were you around before then? I mainly ask because I'm interested in trying to find out if my assumption that people who are new(er) to the space will have a more optimistic outlook in this situation.
In any case, whether we go up or down really doesn't matter much to me. I never trade BTC anymore so I have my position and I just hodl it out. Trading BTC is super stressful...the train could leave any moment without you, if you're not on it for one second
I started buying in May 2017. But trying to pigeon-hole me is an exercise in futility, I'm very non-standard. I did market research first (March / April) based on the entire history before deciding to buy. My initial days were good, but then I ran into the drop from June to Mid September. I lost over half of my investment within a few months. Of course I got it back later on. And then lost it again... And am now in limbo! I've never cared much - counting as I do on the long-term upward trend.
Rest assured that I am never optimistic . Ever. I despise optimists, I can't tell you how much I despise them! As a professional operations planner they make my life an absolute misery! I have so many examples of that this week at work already!
My outlook may be optimistic, but when it is, it is firmly based in realism. Wait until the bull market, then you'll be calling me a pessimist!
Once again: this post: https://steemit.com/cryptocurrency/@bitbrain/i-m-realistic-about-the-crypto-market-you-aren-t
Oh no I'm not trying to pigeon hole you in any way. It's just something I wondered for myself. It's something that I'm starting to notice: all the longer term veterans are really pessimistic it seems like.
From the outskirts it looks like a divide between those who think we have bottomed and those who think we haven't yet and I'm wondering if under the surface that divide is perhaps correlated to the length of time in the space (read: numbed down bitterness). Which will end up being true is a mystery. On one hand the people with more tme in the market have a more historical outlook, but that may be an out-dated approach in a market dominated by people newer to the space.
Exactly for the reason you are stating, the bear period should be longer. 2014 was correction on 2 year bull, now we had a 3 year bull, i would not expect new bull before november
If only crypto was as simple as 1 + 1 = 2. Sadly it isn't. The fact is that we have no precedent for this, the history of cryptocurrencies is too short.
During that history we have had several other corrections/bear markets. They are dwarfed by the big ones, but zooming into the charts clearly reveals them, some with very significant percentage price drops. This version of events affects your take on the market in two ways:
So I'm still fairly confident in my approach to the interpretation of chart data, BUT, I think it's very important to remember that charts are not infallible in any way.
To me a Fundamental Analysis of the current market is more important. From an FA perspective, institutional sentiment towards crypto grows more positive by the week, fuelled somewhat by regulations and financial instruments which are now being developed in support of crypto. The market was also so saturated with FUD that it was rather obviously suppressed. FUD has how almost become a "crying wolf" situation and investor optimism is clearly on the rise. These and many other reasons would make it virtually impossible for the bottom to drop out of crypto right now. Clever money would simply buy it up too fast.
But sit in the bear camp with @pandorasbox if you must. I can't tell you what is right, I can only tell you my best informed guess. Frankly I'm always just glad to see people thinking about crypto issues and doing their own research, even when we reach opposing conclusions. I hope I'm right, but I would be a fool to be certain. Only time will resolve this debate.
Doğru. Bitcoin değeri Boğa Koşusu ile daha çok yükselecek
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