Topic: Bitcoin ready for a correction (Read 4335 times)

There are those that promote bitcoin as gold2.0 and those that think bitcoin 's store of value alone is not enough.

In China, being considered a "currency" would trigger extremely onerous regulatory requirements for anyone transmitting it.  Bitcoin may have dodged a bullet.  Now, there may be more aggressive action in the future.  I fully expect some bad actors in the BTC field to be prosecuted in China, which takes financial crimes very seriously (look at the QQ fiasco).  However, China has not yet done what it did with virtual currencies, that is, outlaw their use as anything other than currency on virtual worlds.

For instance, if I were that TradeFortress guy and actually in China, as the doxers seem to think, I would be watching my back right now.  The QQ swindler got several years, iirc.

Billing Bitcoin as a currency may not have been a mistake at the beginning, like in 2009-2011, but ever since then it has been. Oh well, more money for the people that get it, like Barry Silbert, Chamath Palihapitiya, and the Winklevoss twins.

Also, I don't recall hearing that people couldn't do trades for goods and services with Bitcoin. It sounded more like they meant Bitcoin should not be considered legal tender, or should not be considered official government currency. Which is pretty much a non-announcement.

Wikipedia:
Bitcoin wiki:

And then comes China and rules that bitcoin should not be used as a currency and you call that an excuse and a small trigger? 

I know that you want to believe that it was your TA that it worked but in this case  things are obvious.
It's from now on that you 'll see if you were right or not.

Very agreed on that, and in fact sold before the China news.  I thought the event was overdue, and while the China news could have set off what was already going to happen, I really think its effect is exaggerated.  Correlation doesn't equal causation, and while there is some tenuous causal connection between the two events, it really just affected the timing.

I think it's probably going to go further down as well, but bought back in anyway because I don't like cutting things close.  I'd rather sacrifice some (potential) profit to avoid risk (and so that I can sleep at night again while the ticker goes berserk instead of waking up like a lunatic to stare at my phone for updates every 10 minutes).

Just came here to quote this post

PenAndPaper: You are not wrong in what you said, Technical analysis is tricky and doesn't always work. I really believe in the double top + MACD-Histogram divergence. I use it to trade options on stocks with high success rates. It is not the double top alone, but a specific set up with more constraints. The MACD-Histogram divergence is very significant and makes this double top a rare thing and that's why I posted it. I don't like to post a lot even though I'm not so new here as you might think from the number of posts I have.
Please note that I posted this chart before the news and before a "proper" double top has formed. A "proper" double top is only confirmed when the right side of the down trend happened and this is shown on the second image I posted here.
Regarding the cause of the downtrend, I believe the news from China is just an excuse or a small trigger. I believe mass behavior is better predicted than individual people's behavior and you can see changes in the general mood in the charts. People were euphoric when I posted the chart and most threads here discussed the exact timing of bitcoin reaching $2000.
Technical analysis is not an exact science, you can not make controlled experiments and you certainly can not repeat them. These are inherent limitations in the social world we live in and trading is a social activity.

oda.krell: I appreciate your support, thank you. On a personal note, even when I see the chart turning bearish I sold only a small part of my account since I still have fiat coming in every month from my business and in the long run I'm extremely bullish about bitcoin. I buy bitcoin on a regular schedule every month and maybe I will increase next month's wire transfer.

I try to stay focused on the large picture and not be caught up in the minute by minute or even hour by hour fluctuations. That is why I look at long term charts. They are the easiest to apply technical analysis to.

MikeyVeez: I took a screenshot of bitcoinwisdom.com and manipulated it to remove all the noise and emphasize what I wanted with some drawings.

Keep up the nice discussion my friends,
Ami

Where do you get such nice charts?

Actually i am like most people around are. Still am i wrong with what i said?

What's wrong Pen? You seem stressed

Op posted a double top and a macd graph and claims that this is a technical analysis that somehow explains the drop while the drop had nothing to do with anything besides the news from china.

I can show you 100000 double tops before the op's one that meant nothing. When you just get lucky you don't go out to forums and brag "look my TA worked" especially when it is so obvious to everyone about what happened.

Hm...


Price was around 1050 at that point (mtgox).

Anyway, I never called an entire group of people "clueless" and that I somehow "take their money". I call people that bullshit about the worthlessness of TA clueless.

If I misunderstood you, and you're just pointing out a particularly weak point in OP's analysis, my apologies. But if you doubt TA as a whole: well, guess what? You probably shouldn't actively trade, since that would gambling, wouldn't it? Buy & Hold is your game then, I guess.

I guess the reason why especially so many newcomers are very aggressive is that they are scared of losing money. They bought at 900+ and are looking at losses now. They flame everyone who gives an honest opinion on what TA currently shows.... a much further drop downwards. Can´t wait for those pigs to get slaughtered once we move further down.

It looks like you are losing your temper so i can only guess how well technical analysis worked for you. Keep it up and take all the money from the clueless people that we are.

Why the aggressiveness? He made a relevant remark about double top and volume. I pointed out that the volume part of his argument wasn't very precise. The market dropped a few days later.

You're free to say "it's just luck, twice a day even a broken clock is right". In other words, you don't believe in TA. In other words, you're clueless and probably shouldn't trade. (go to lucif's thread to get a taste of what someone with actual intuition *and* technical knowledge can do).

Are you for real? What technical analysis? The double top that happened like 10000000 times during the rally from 100 to 1000+?
 It was the news from china that caused the crash.

jamesc760: Ha ha, they say - "Don't feed the trolls"...

oda.krell - I did sell, but a small portion of my holdings, the majority is in a paper wallet and I plan to keep it in paper for a few years. I will buy back soon. I add fiat on a monthly basis and I won't rush my schedule because of this crash. It might not go up too fast.

Usually I spot these events in high volume / high quality stocks but on weekly candlesticks. The pace of events in BTC is faster, that's why I look at daily candles. I know many look at 1 minute candles but that's too myopic for my taste.

Of course he mad, he bought in st 1250 and panic sold thrm all at 600!

Jup. Credit where credit is due. Good call OP.

Did you get out at around 1200? I didn't, took me til around 1000 (bitstamp) before I decided we're stalling and sold a substantial portion of btc (with the goal of rebuying lower)

So, I waited enough...

It's nice that sometimes technical analysis works 
I wrote an update, click the image to read it.

http://chartly.com/wp-content/uploads/2013/12/btcusd-dbltop-success.png

Distribution of coins to new holders. The nature of an exponentially growing marketplace of users is that there are always exponentially more new users, and new users tend to just accumulate for a while.

Just went down to $900, will any more weak hands shake out their bitcoin even further down to $800? 

http://www.youtube.com/watch?v=A2HdJ0c4hP4

My gut & charts tell me it will go UP...

So, another day passed, it came close to $1242 which is the all time high from 7 days ago.
Today it was at $1240.

Down or up?

Volume is very low, this could mean that it will go up soon. very soon.
The original thesis here is that it will go down to maybe $800 for a short time at a high volume before going further up, much further up.

You're the only trollface I see here.  And welcome to the troll hole.

*plonk*.

makes sense, i agree.

I guess that's where etf's like second market and the winklevii one step in. They can cover that untill regulation gets cleared up.

You might wanna ask yourself how long it takes to call Bitcoin at certain price stable.
I dont see Bitcoin going under 1000 USD. Its just too much time over 1000.
I think we are safe saying that 1000 is the new bottom

I have noticed strange happenings WRT bitcoin and volume.  In particular, bitcoin has high volume corrections and then low volume returns, even in a bull market.  I've seen this pattern so many times that I think that volume based analysis derived from stocks may be faulty.  This is often followed by oscillations (a triangle for you TA people) and then upwards breakout.

One explanation may be that on every down tick some coins go into long-term wallets.  This creates a lower supply at these previous price points.  Without that supply the return must necessarily be low volume.  

Vendors on LocalBitcoin are currently around or even lower than Bitstamp rates.

This is rare. Normally ~ 6% premium over Bitstamp to be paid there and I have seen as high as +30% being a 'competitive' rate on LocalBitcoins.

This tells me that the vendors believe an imminent drop in price is likely, otherwise why sell on Localbitcoins with all its attendant risks and potential headaches for the same rate as they can get on Bitstamp?

kraken, localbitcoins, both are fine.

if there were more reliable /trustable exchanges a lot more people would sink money into BTC
in larger amounts

nobody wants to send shitloads of money to eastern europe or russia and take the risk of them
running with coins and claiming a hack or just disappearing altogether

ideally ,every country shud have an exchange so nobody sud have to transact interantionally but
we are just not there yet ....hopefully soon though

u mad bro?

Charts look the way op described but some pr buzz from example can push the price over 2000$ and then the real bottom will be much higher than it looks right now. Actually i think this is what 's happening over and over.

Indeed!

Such a reaction (aggressive denial) in the face of a reasonable bit of speculative analysis suggesting the price may go down almost had me reaching for the SELL SELL SELL FKN SELL button.

Instead, I have just put the little tosser on ignore, have taken Amhii's comments on board, but am sticking with my gut instinct which is telling me at the moment to be patient. (I loaded up just recently at just a bit short of these high price levels).

oda.krell: Nice observation!

I did had that prediction and it failed.
Lucky for me, I didn't sell at all at the time. I only delayed my next buy.

There is a pretty large gap between these technical predictions of a down movement possibility and the actual account movement.
My main lookout is bullish and I will be very happy if the price goes up to $2000 and only then does the correction dance.

I guess we'll see one way or the other in a few days.

Your post does not exactly shout confidence in current price level

The problem with your analysis is not that it's invalid per se, but that you're kind of sloppy in executing it. Even a cursory glance at your own chart will show you that a very similar pattern actually appeared on November 10 and 19th: volume (and momentum) declined as we recovered from the hit (and approached the respective ATHs). And seeing where we stand now, I wouldn't put too much weight on that signal.

In my opinion before a real correction happens (one that we don't recover from within a few days) buying pressure needs to lessen substantially. There's a very mild decline of it on btcny perhaps, but I don't see it as substantial enough to end the rally quite yet.

I agree. Wait and see.

CoinCidental: I know there is a lot of buying pressure. I only wanted to post this at a public place because I've seen this pattern in many different tradable instruments, from S&P futures on 1 minute candlesticks to Single stocks on weekly candlesticks!

adamstgBit: It might not behave "right" as it is in an early growth phase, I agree with you. But technical analysis can work in this situation too. We'll see how this evolves pretty soon.

If the $1200 level is broken at a heavy volume, consider this analysis as failed. I only used a small part of my holdings for this.

$1200 again now on gox

i think there are plenty of sharks in the water at the moment so if bitcoin prices were to tumble from a large dump etc
they would all be snapped up ASAP and start to rise again to  $1000+

bitcoin has  gotten so much publicity lately people are  having difficulty getting money in exchanges to buy any

well, anything is possible. It seems to have pretty strong support above 700 at this point. People have been saying it's a bubble now since 1000 (since 800 really). Time will tell. I thought I bought into a bubble at 320.

oh come on he has a reasonably good analysts.


I disagree, bitcoin is moving up FAST for a good reason. technical indicators won't make much sense until the market can price in the growth, this could take years, as the growth is ongoing, and shows no sign of stopping.

I think there will be a final leg up to about 2000 and then some real crash/correction. Given of course that 1200 is broken in the next 48 hours, which I think it will be.

Didn't we just have a correction? In my opinion we are seeing the same pattern we saw after the last correction when price dropped from 900 to 453 on MtGox. Price is recovering fast, then we see a consolidation on low volume just below ATH and then a significant breakout happens on higher volume. Maybe this time it's different, but that's what they always say don't they?

Yeah man. He is just speculating. We all like guessing what the price will be, even though no of us knows. 

Damn dude.  Why so hostile?

who the hell are you mr trollface? Go spam on btc-e faggot
You just want to buy lower. Kinda sad.

Bitcoin has gone up fast in November 2013 and now in early December it might give you an opportunity to buy at lower prices again.

The daily candlestick chart of bitcoin vs. the USD on Mt.Gox looked very familiar to me and convinced me to sell some bitcoins, if and when the value drops a bit, I will buy back more bitcoins.

http://chartly.com/wp-content/uploads/2013/12/Screenshot-from-2013-12-04-155041.png

The high of $1242 from 6 days ago is tested again today. If you look at the MACD-Histogram, you will see that it is not matching the pattern of the price movement, it is steadily declining.
Don’t take me wrong, I sold only a small part of my bitcoin holdings as an amusement ride. Most of my position is a long bitcoin one.This is a classical divergence and could be a sign that the bitcoin price is about to drop sharply to $800 or maybe even lower, this is the level of the lowest price 4 days ago.

I will be amused if the drop in price will trigger a media frenzy where they will call it an unstable asset, not suitable as a currency and too risky to use in any way. This may actually help the down movement I anticipate here.
rough a rapid up trend similar to November 2013 to the next level.Later on, the media will neglect bitcoin and it will stabilize around a new level, at the neighborhood of $1000 for a year or less, then it will go through a more quiet phase.

What do you think will happen to the price in the coming days and weeks?

http://chartly.com/bitcoin-ready-for-a-correction/