Topic: A potential top @ $12.16: the bearish case (Read 7775 times)

I think this drop to ~$8 is just opening a buying opportunity to a lot of people.  Although bank transfers to exchanges takes up to three days.  So I expect the price to be going to ~$9 for Friday but a lot of people could sell off their coins they receive back off Pirate so maybe staying around ~$8.50.  I can't see it going below $7 (for long) unless all the buying pressure that caused the rally was based around Pirate.  Even if it was I can't see it going below $6 and staying there.  That's my view on the outlook anyway.

That will most definitely not be the case.  I doubt the price will be out of the $2 to $15 range a year from now. 

Updated the trend analysis here:

https://docs.google.com/open?id=0BzdbolIn7zf1dW5IQnpUWTllZHc

In the grip of the red candles, so far.

I would too, but if I'm lucky and my count in the OP is accurate, than we should ultimately see more panic here than we did during the wave A decline from $32 to $2. A waves are generally coupled with a psychological backdrop of disappointment and surprise whereas C waves are when outright fear takes hold. If it does unfold in this manner, I hope to be buying like crazy at the bottom.

But... we'll just have to wait and see what happens I guess. There is no crystal ball, only probabilities.

I think Pirate may have managed to slow the acceleration down a bit like he has before but the long term trend is definitely up tho maybe after a bit more correction but I'd like a bit more stability like from March 2012 to June 2012.

You will find out ... in the longer-term.

You ever heard of the turtles?

https://docs.google.com/open?id=0BzdbolIn7zf1czhubUR6R2RoQVU

Just wondering if the longer-term trendline holds.

A year from now, ya'll will be complaining about 25 cent price swings on $100 BTC.

... and ... meanwhile it's on it's way back up again

The drop was probably a dump of BTC and the usual jumping around after that, but since the latest rise hasn't been a typical random bubble but is being backed by some sort of demand/support for BTC, it's continued after the dump.

... and if I'm wrong, yep I'll admit it, and the facts will show it too if I am wrong, I don't see any point in pretending I'm psychic

It's rooted in psychology and the chart he showed was sent out on August 7th.  Somehow he made a pretty accurate description of what happened two weeks later.

If a day and a half is "sustained" in your world, I can understand the confusion.

I actually know quite a lot about the subject. The "wave-4 tricky, blah, blah, blah, surpassing the upper channel trend-line, blah, blah, blah" you wrote is a bunch of nonsense derived from fairy tales dressed up to look like science. It is nonsense because it is just a bunch of pseudo-science built from Elliott's numerical hallucinations. It has as much validity as scientology and homeopathy, and of course, astrology. If someone could come up with a rational theoretical basis, or even some conclusive empirical evidence, then the subject might be transformed from mathematical allegories to a real science. But they can't. So, it remains stuck in the realm of confirmation bias, with the same stature as the science of street light interference (aka SLI to the believers).

As for the $12 mark, there was no top at $12, as your precious fairy tales predicted. The rise above $12 was not obviously unsustainable because the price was sustained well above your magic Fibonacci number. The fact that the price fell a few days after your misprediction was just a coincidence. You can not and should not try to take credit for anything here. Anyway, the fall in prices was caused an unpredictable event, not by crowd psychology or mood swings, which Elliot Wave Principle is purported (without substantiation) to be based on.

Oh btw, your $12.16 top looks more like a support level than a resistance level. Oh, but of course, resistance levels become support levels. What a lucky break -- your Xanadu remains intact. Isn't 20-20 hindsight precious?

/vomit

Are y'all crazy? It jumped $2.40 in one day. Even the biggest bulls could see that was ending badly. And the "correction" has taken us roughly 50c below the start of that spike. If there were any bearish sentiment about the broader rally, stop-losses and fear would have pushed the price a lot lower. Especially given how light the buy side was at that point.

I'm not saying that we've seen the lowest point yet, especially being the weekend, but if you think this is likely to last, I think you're in for a big surprise. A genuine rally has just dipped, after weeks of non-stop growth. This is where the fun really starts.

Cypher, can I put my dancing bear back up now?

The daily and weekly underlying indicators say otherwise

Exactly! What a good opportunity to buy now.

On the upside, if the price more or less holds, it solidifies the fact that the gains prior to that massive jump were solid, not speculative, and the growth we were seeing before should continue

You might actually want to take the time and learn about something before you completely discredit/insult it. The rise above $12 was obviously unsustainable and the vicious consequences were just as predictable: http://imageshack.us/f/839/389b.png/ (taken from past subscription chart 389)

the wave-4 ended up being a larger running flat which was tricky, but the aftermath of the price surpassing the upper channel trend-line was the same -- an extended 5th (a classic commodity/currency bubble wave) before a plunge.

No. No it's not. There's a 30% difference in price between three days ago and the crash. Don't start believing your own hype and don't quit your day job.

Somewhere between 10.60 and 15.40 it will be 12.16 and the week is not over yet. Hell, I'm waiting for the "I sold everything at 15.40 and bought back at 10.60" threads. Hindsight analysis to verify vague predictions does not science make. TV evangelist prophets get a lot of donations for that kind of scam. Nowhere have I seen a stable 12.16 or anything close in a long time. It will take a prediction of stability at a price before I can believe any type of prediction methodology. But in case you are wondering, 12 is about the break even cost of the average small time bitcoin miner using pools, so that is a good reason to believe 12 can be stable.

Correct. The retracement went a bit higher than I expected, but I think being within 3 days of a major top is pretty damn close . $12.16 would be the first fib resistance point about 38% whereas $15.40 is about 50% which is the next major resistance point.

I think it's likely that Wave B is over and Wave C of II has begun to the downside. As I said in the OP, I'm still holding long with the coins that I already have, but I'm not buying any more coins until they reach around the $2 level again (unless my outlook changes).

Today's action certainly looks more like a major reversal rather than YANC (yet another normal correction):

Was the drop from $15.40 down to $10.60 part of that prediction ...

Well, i have to disagree, and with me a big part of natural life.
Fibonacci sequence relations are very handy for space-packing, for instance.
The ratio has fractal like as it can be described as a recursive function.
Random webpage proving my point for me: http://www.maths.surrey.ac.uk/hosted-sites/R.Knott/Fibonacci/fibnat.html
I would agree on your numerology argument if it wasn't about the ratio.

I lol'd

Sorry, thought the rationale for analyzing the market was for executing trades. If that isn't the case - I didn't mean to allege any trading activity.

Ah - so you are in the market. Fair enough. Just was curious if you had any limits or stops for money management. You've answered my question. Good luck.

Shh ... people might realise that anything with any sort of volatility goes up and down ... and not like a predetermined function ...

Well, now that the price has gone past your $12.16 top, what do your astrological technical analysis charts say?

Elliot Wave Theory is a bunch of useless nonsense. Fibonacci numbers are just numbers. They aren't magic and they are not connected to trading or bitcoins in any way. There I said it.

Seem's like a good time to announce a half-price special...  You'd still be getting more fiat for your service than when you started.

yep, I just keep forgetting to post the update here.

what ever happened to wave addict?

is he still sending out e-mail?

What trades?


I am long BTC without a stop and believe the B wave potential is still on the table and may present a buying opportunity in the future. I've said this several times already.

ROFL

I understand that wave theory presents these possible outcomes, just was wondering if there was any money-management behind the trades. If the original poster has stops or limits that would take them out, I'd be interested to know what price that would be.

Thanks.

  I think the pricing will go higher simply because of the economic collapse in Europe followed by the difficulty increase.Unless some 'tard with a lot of BTC decides to just sell a huge amount to affect the current rally.

According to these charts the price will be going higher:

___/

I want the price to drop a lot so I can buy more. MOER!

Is anyone here actually buying? I am getting dizzy at these heights.

+1

How come when I look at those charts I just see a bunch of made up lines having no connection to future prices. Almost all the *real money I have made on wall street has been by betting against the "experts". It is a well known fact among traders that market gurus almost never do better than random chance.
In the time I have been here I have seen countless such threads and they never pan out.   

August 9th was a failed push down (inverted cross doji on high volume). Since then, the price has been drifting up on relatively low volume. Unless we see volume pick up, this could be similar to a dead cat bounce. Watching cautiously.

This.

Thanks for posting something intelligent, in contrast to all the snickering posters who don't understand enough wave theory to comprehend the nature of the idea, or the specific fact that I said it's a potential wave count with some real merit to it and not even remotely meant to be an exact forecast, especially in the short-term.

Again:

I've lost some respect for some of the other commenters.

I prefer Canadianology. You double it and add thirty, eh.

    Last price: $12.35999
    High: $12.40493
    Low: $11.92500
    Volume: 45391 BTC
    Weighted Avg: $12.18958
    Mt. Gox

Well it certainly went above $12.16 already ...

Though I guess the reality of it was that you said it was going to be $12.16 ... unless it went over $12.16 ... then just say that the new high doesn't invalidate the theory ...

In theory, there is no actual price that invalidates the B-wave possibility. In practice, a B-wave typically retraces to 38.2%-50% Fibonacci retracement level of the preceding A-wave in a zigzag (5-3-5) corrective as opposed to around 100% in a flat (3-3-5) corrective. Now, because the move off $2 was composed of 5 waves higher within a basic channel, the flat option was invalidated leaving the zigzag. In short, if the price heads above $13.46-$17 (38.2% - 50% Fibonacci retracement off a $32-$2 A-wave), the price is likely heading above $32 in a 3rd wave. Until then, the B-wave is just as likely as a 3rd.

Also keep in mind that, if this is a B/X-wave moving higher, it doesn't necessarily need to head below $2 in a vicious C-wave after it completes before heading much higher. In a very large triangle or combinational corrective, the price could head sideways between $32 and $2 for years before finally taking off.

well the Fibonacci ratios converge to the golden ratio so what's the point?

tbh I never understood the obsession with it, it's numerology imo.
Well we'll find out pretty soon if we move beyond it.

I guess it's something like

32*(1-5/8)=12 to 32*(1-8/13)=12.3076923
or something....

numerologists 

notice the key word...

12ish is the "fib resistance"

are we seeing any resistance right now?

OP said something about fib resistance levels.

So that would be $32*(1-1/phi) = 12.2229124

I'd say the "Top at 12.16" theory is roasted at around 12.17.

Quick question - for the original poster - at what price is your theory invalidated? (Mental or literal stop-loss?)

13.16?

14.16?

Just curious.

Cool my bids will be there once you panic sell them.

Since it has to be graphic:

Good, I don't want you to buy bitcoins... the more you buy, the more expensive they become for me  

Actually I bought around 300 USD worth, but not recently. I am midterm bear and a longterm bull. I probably will be around longer than most people here...

Actually, judging from your postings you are a real bear. And I am sure that is why you have never bought any bitcoins. They can always only go down, according to you.

very graphic, but to be honest this doesn't make me wanna buy more bitcoins.

And what do you think will happen with that lone bear in the middle of a very huge running bull herd? Exactly, he will be trampled to death. Makes me feel sad, because as we know, in reality this is most probably not a lone bear, but some bull in a bear costume.

FTFY

Seriously the forum has been so much full of Bullish posts that this lone bear thread is almost refreshing.

Don't know,but early this morning I saw Mtgox top out at $12:38.I think it will break $13 within the next week 1/2.

Now what else can they do? They have sold it all, and have no chance to buy back. So they are spamming like a boss, in the hope that someone will lose his sanity and sells.

Wow, bears trying to spam off and hide the massive multiple buys up to $12.17ish just now? Waiting for that wall to disappear, any hour now...

If this is as "successful" as the "war on drugs", the price will not fall. What happens is, that the volume is much smaller.

I think we're a bit past that

If people start panic selling even at $12, that means the demand still mostly comes from manipulators and basement kids who invested their lunch money, rather than serious investors, this is not going to be good for bitcoin.

A SR user buys 20 bitcoins and then buys some weed with it right away, the seller of that weed then sells the 20 bitcoin right away. all this dose is support the current price.

that's the only effect the bitcoin economy will EVER have on bitcoin price, it will support the price, at wtv the price.

if the bitcoin economy sells 1 billion dollars worth of stuff everyday, bitcoins will shoot up high enough so the bitcoin economy isn't messing with the supply needed for speculation.

speculation will ALWAYS eat up 90% of the supply.

That's probably the first thing you've said that I have to agree with. But I think your bear would be surprised the hidden interest a tiny perceived buying opportunity can bring. If you've ever traded real stocks, take a look - this stock was my personal plaything back then and still has to be my favourite, ever. You'd be stunned how many of the upward moves were prompted by a 2-5 cent dip.



That said I just don't see any major buying opportunities presenting themselves in the near future. Slow as she goes.

If people treated them as a deflationary currency in its own right as buyers, I think you'd be right. But most listings on SR are tied to a fixed local fiat currency amount.

You've got people buying BTC to buy anonymous drugs, a lot of BTC being held in escrow, and then BTC being sold by the sellers to exchange for their local fiat.

My point is, there are only so much up for grabs at a certain price point. The price is going up because people are holding onto them, period.

Anyway, if I could predict the future I would have bought BTC at 8 cents each when I had the chance.

again i hate being a bear, makes me feel like and asshole...

but, no way can this true.

I think we're getting to the point where demand for it as an exchange medium (i.e for Silk Road transactions) is beginning to exceed available supply, so I'm in the bullish state of mind. Especially when you factor in all the speculators who are holding onto them when the purchased them at a bargain earlier this year hoping to break that $30 price point again. And Pirate having to repay investors in BTC when he initially converted their funds into something more liquid...

+1 this is correct. BTCUSD should not move below 7.22 in the near future.

Never was much of a fan of old 'backfit' Elliott Wave. Seemed about as useful as the 'ZigZag' indicator a lot of charting programs use - they have a warning not to use it when programming trading strategies, as it is a backward-looking indicator

Anyway, I say stick with the trendlines that have been established and scale/stop-out if you get closes below it. Everyone has their favorite method, no doubt.

Perhaps there are attempts being done by buyers to specifically hinder or impede this tracking of demand from happening through the use of non-disclosure agreements, use of physical cash, gold, silver, etc.

So you bought back in, ay?  

So from your prediction of $7.20 being 2012 high, I that to be get ready for a higher high. Cheers.

I think fundamentals trump technicals, so I don't see a major correction as long as worldwide economic conditions continue to give people reasons to find alternatives to the traditional monetary system and national currencies.  But I can conceive of some extreme (unlikely) scenarios that might cause a giant correction:

• Major flaw or vulnerability in algorithm(s) discovered. If truly unsolvable, I guess price could go to zero as the whole experiment is abandoned.
• Powerful entity (e.g. a government, the UN, etc) declares explicit war against Bitcoin or affiliated entities (SR, Gox, etc) using some flimsy excuse.  Actions taken through regulatory/legal/cyber channels & arrests are made.  Weak hands would assume the worst and sell, true believers would hold on.  Price could fall drastically to some very low (but nonzero) amount.
• Early miners holding millions of BTC decide to sell all at once.  Stupid, but not impossible, could drive price to low digits.
• Satoshi comes out of hiding and declares the whole thing to have been a giant joke.

Pirate blowing up, exchanges getting hacked, thefts, viruses/trojans, I don't think any of those things would cause a major drop at this point.

From what point are you counting the start of wave 1, the inception of bitcoin?

See now that's what i'm taking about!



I see the bullish chart as not only likely but necessary. The rise has giving new hope for 100$ bitcoins, but before that can happen new money has to come into the market, and for new money to come into the market opportunity must be presented. 7.22 will the opportunity of a life time.

Fascinating.

Once my loans mature (>75% of my btc), I plan to sell 50% of my btc in hopes of a plunge. If i'm wrong, I still have half my btc, and I'll just keep waiting for a plunge with my other [sold] half.

LOL

Awesome. 

Thanks guys!

@S3052, Agreed! It is very unlikely.
However, it should be noted that, if we were to have a deep correction, and drop below the wave-(1) ($7.22 high noted in the "bullish" representation), the current situation would be the topping of a wave-(B), and we would be looking at heading toward a new low. This is because, from an EW standpoint, once we passed the January high, and a wave-4 cannot overlap a wave-1 there is now nothing stopping us from seeing a new lower low.
(I know you know this, I'm just clarifying for the EW Newbs.) 

Nice comparison.

The count for the bear case is rather unlikely since the time span for a wave 2 correction would be too long versus the wave 1 advance. It is not impossible but does not look likely.

Nice picture.

Here's a Bull vs Bear visual to go with the explanation given by BrightAnarchist.

Interesting point.  Is anyone attempting to track aggregate demand across all trading options, to the extent that that can be done?

While trading volume at the top exchanges might not be at heavy levels, there is trading through alternative methods that is gaining in significance.

With individual traders finding ways to trade without going through Mt. Gox or the other top exchanges, there is now less low hanging fruit feeding the traders and bots.  As a result, the reported trading volume can be down with no real difference to supply and demand.

FashCash4Bitcoins (a cash-out service) reports hitting record levels pretty consistently.  Bitcoins can be bought directly from Bit-Pay (minimum $10K USD order size) and Tangible Cryptography (amounts up to $5K USD), for instance:
 - https://bitcointalksearch.org/topic/m.996082
 - https://bitcointalksearch.org/topic/bitcoins-direct-support-thread-87094

Many alternate exchanges show consistently growing volumes.

Now that there is a trust history, there are buyers and sellers who have traded with each other before and now mostly trade over-the-counter directly, without any intermediary.

So the volume at the exchanges can go down but that doesn't mean there is any less demand for bitcoins.[/list]

$1 isn't going to happen without legal intervention. I would be seriously shocked to see $2 again.

Yeah, and of course the bearish case is actually bullish anyway... it all depends on the time frame!

That's why I said I'm long no matter what, but if we do get a nice drop to these cheap levels, I'm buying way more coinzzzzzzzzzzz

Thanks, now I get it.  I said 'bullish' but meant 'bearish' which you answered anyway!

I haven't really investigated the bullish case, but here's the bearish case in better detail:

Wave I is the impulse to the bubble high of $32. It has a 4th wave in the 50 cent to $1 area.

Wave II is where we may be now.

Wave A of Wave II was the "crash" down to $2, then we began a B wave up

Since then we've done an even smaller a-b-c to form the B wave, which should end eventually with a nice lower high, potentially at around $12 (but there's a wide range here, I'm just making a guess based on volume).

So next would be Wave C down to end the larger Wave II. Then at around $1 we begin the giant Wave III to the moon (i.e. past $100/coin probably).

Could you label the bullish case on a chart for us?  I'm confused by your description: is the $12.16 price the end of a B wave or a C wave?

• Volume has been decreasing on each major move since mid-July
• $12.16 is ~38% of the move to the all-time high, a Fibonacci resistance level
• We could be ending a C-wave move of an a-b-c countertrend that began at the $2 low (which itself is a B wave, making the "crash" the A wave and the C wave yet to come)
• The stability around $5 resembles more a sideways B-wave than a deep 2nd wave retracement prior to a large impulse move
• On a logarithmic chart, the $2 low was still not within the 4-th wave area of the 5-wave bubble move to $32. This 4-th wave area is between 50 cents and $1.

I of course have no crystal ball, and the super-bullish scenario is also possible where we're starting a 3-of-3 up to past $32. But - if there's a bearish case to be made, then here it is, and here's me hoping for a buying opportunity in the future.

Either way, I'm long BTC, but if it gets to the $1 level, I'm buying even more with both hands. Fundamentals are the biggest reason to be bullish, especially with Silk Road growing like it has, so I'm quite curious so see how the next few months unfold.

Log Chart:

http://bitcoincharts.com/charts/mtgoxUSD#ig6-hourztgOzm1g10zm2g25zcvzl

Discuss.