What’s A Blow-off Top?
In my last post I mentioned the possibility of a blow-off top in Bitcoin trading. Upon being asked about what a blow-off top is, I decided to do this follow-up.
Investopedia’s definition of a blow-off top is:
A chart pattern that indicates a steep and rapid increase in a security’s price and trading volume followed by a steep and rapid drop in price and volume.
Perhaps one of the most dramatic blow-off tops of our time happened in the NASDAQ back in 1999. It took 17 years for top buyers to get back to breakeven, that is if there were any of them still around.
West Texas Crude is a more recent and just as dramatic example that left bag holders feeling a lot poorer. This market still hasn’t recovered.
Those "other" fiat alternatives, gold and silver, are prone to blow-off tops.
Looks a lot like what we often see in crypto, don’t you think?
You need a basing pattern, a series of higher highs and higher lows, and then a parabolic move. The meme is always the same: “this time is different”. Pretty standard, almost boring, stuff. The thing is, in traditional auction markets, it’s a phenomenon that isn’t all that common, while in crypto it’s practically a daily happening, eh, well, in what have come to be called “shit coins” anyway.
But Bitcoin is different, right?
https://blockchain.info/charts/market-price?timespan=all
Thanks for sharing, I have learnt what a blow-off top is. I think this might be what is happening with bitcoin.
If price is able to jump above, and stay above, the upper channel boundary, then the prospect gets much more likely. That having been said, there's nothing keeping if from reversing lower from right here either. A rejection from upper channel resistance could lead to something bigger. From the looks of the longer term chart we'd be calling that a spike high top. A blow-off is only one possibility. 😉
A spike high top, that's another one lol. A spike in bitcoin would favour alot of persons, but if a blow off top affects bitcoin, then it might favour some altcoins.
@cryptographic thanks for explaning the blow-off the top is. Appreciate you are sharing your trading skills. Upvoted @gold84
thanks for telling us about blow off top definition, well yes it's boring if we see a market continuously moves in one direction, well in bitcoins case it's looks like a good correction coming up very soon.
Only boring in the sense that the setup is a long term, ho-hum process. The topping process is quite exciting, albeit fleeting.
@cryptographic,
As you said, every peak has a huge depth! BTC price seems at a peak and seems it will drop again and then it might rise up! Great analysis friend! People should understand the risk behind this abnormal price up!
Cheers~
Thanks for telling about in details :) nicely explained
have learnt what a blow-off top is. I think this might be what is happening with bitcoin
Got to get up above that upper channel resistance first!
Some people might suffer as for buying at the peak but who knows it might be profitable for them as well
Nicely explained buddy
It's a question of time, and diversification.
Not even I would go so far as to speculate that BTC is a guarantee.
You were nicely explain about bitcoin and other old cryptocurrencies use great examples with timely movement analysis graph. As my mind, Bitcoin price may be low down and may be high up. But always we can trust to bitcoin. Bitcoin is "KING" of the cryptocurrency just now.
Please look in to others graphs. NASDAQ back in 1999. Its slowly started then high grow up instantly. But after huge drop down within 3 years.
West Texas Crude is a came more recent. Its slowly start and slowly grow up. not instant grow up. But unfortunately these market parabolic crash low S33. Its massive blow to investors. Other currency market situations same.
So I highly recommended BTC is better way.
Upvoted & Resteemed
I think the odds highly favor BTC following in the steps of its historical brethren.
good work my friend
Thanks for the information sir.