Topic: Something, something, something, technical analysis - page 15. (Read 31170 times)

Let's try a new triangle, to describe the bounds of a continued bear market/consolidation, i.e. in case we don't manage to "defend" the current ~500 plateau:





Judging by how the market seemed to resolve (or at least: test) those triangles a bit ahead of time the previous instances, we might see a decisive move against the bounds of this triangle in late May/early June.

I have no idea what is a general sentiment among miners - but what I gleaned from bitcoin talk discussion is that they view current price levels as temporary and are trying to survive by taking on debt.

I do agree that mining does not make sense economically atm - some of the miners are using curious argument of the type "I mine bitcoins while I still can" 

Anyways, I am also waiting for imho inevitable crash in mining rig prices and perhaps bankruptcies of some mining companies. Miners can be in a real tough spot soon - unlike GPUs, ASICs can be only used for mining, so their prices can decrease dramatically.

Miners talking about maxing their credit cards to cover expenses is very bearish news.

One can't really say second or third hand from a forum post, but if that's true in any widespread sense, then that is bearish indeed.

I think its dumb to be a miner in this market anyway. Better just to invest in bitcoin. Mining makes no sense at a small time player level. Better to mine alts.

I also believe the current stagnation is a sort of stand off between btw hodlers, refusing to sell, and investors waiting with fiat on the sidelines, refusing to buy at  the current prices. Of course, I cannot know how it resolves - nobody can. But I have read the miners forum and miners there are talking about maxing their credit cards etc or even not paying bills, fully expecting that prices will go up substantially in the very near future. Many miners will *have to* sell some bitcoins soon, just to cover their expenses. OTOH, nobody really *has to* but bitcoins ... So imho, price is more likely to go down, at least until the situation with many miners being in debt now would resolve. 

Yeah, sorry, should have phrased that more clearly. I meant the level that the first major rally takes us to after a capitulation bottom (or what looked like it at the time). So, around 630 in early March, 490-500 now. Which is, to my mind, the plateau that needs to be "defended" by a combination of lack of selling pressure (done) and sufficient buying pressure (outlook hazy). Once it was clear the plateau can't be defended (like in March 18 to 20), the panic selling started.

Is that around $440, in your opinion? Or $400?

As for your other comments, I guess I don't remember people feeling the same after the Gox situation. Maybe they did. It did seem like not too long before China reared its ugly "news" head.

I will say this, if this market lingers downward and then in a couple of weeks we started getting "negative news" from somewhere, (quotes suggesting that the market just chooses some news to classify as negative) and that causes more and deeper sell offs, then I am going to be watching buy volume like a hawk in the future. It will prove to me that buy pressure is much more important to the bulls recovery than a "lack of selling" pressure.

I actually think that perfectly describes the current situation. But you're forgetting one thing, imo: that already was the situation in early March, or pretty close to it.

The big panic moments seemed behind us. Holders vowed to not panic another time. "This time we will just hodl, no matter what".

But then the low level selling pressure (China? Mining? Both?) slowly made the price grind down, and that always has a habit of turning 'I swear, I will never again panic' holders into, well, panic sellers.

That's on the horizon again, unless the price level where we landed after the initial euphoric swing can be sustained this time.

My gut would tend to agree with you. And my instincts are normally spot on.

However, there is a truth that if everyone refuses to sell, that the bear market can't continue. And it seems like fewer and fewer people are willing to sell on the exchanges that control the price. Why do it, when you can sell off exchange and not make the price go down? (I'm talking to you miners).

As much as there isn't demand to push the price up, the question then becomes who is left to sell?

I know it seems like the answer to that question has plenty of answers, but it even felt like the last capitulation to 340 was basically agreed on by everyone in advance. Now it seems like everyone is agreeing to wait it out until we go up.

That sounds, on its face, like sheer lunacy. But there is more than a 0% chance that this is actually a close description to the situation at hand.

If that happens, I'll be buying all through the $3xxs, $2xxs and $1xxs.

I'm not entirely sure we're out of the downtrend yet. The trendline might have been broken, but at the same time this price movement looks very fractal/self-similar to me. The previous 2 major drops have always been marked by a sharp increase directly afterwards, followed by a slowly stagnating price for a few weeks/a month, before dropping down heavily again. This pattern seems to be shaping up at the moment as well, particularly in relation to the last such cycle, which would mean price going down to $400-ish by mid-May, after which time the triangle will have long ended, leaving very little support to prevent a sharp drop.

Along with this, I'm trying to apply my fibhorn technique to get a sense of price targets if the bear scenario is still relevant. While previously $260~ has seemed like a solid target, the latest price developments seem to be painting an increasingly bearish picture, with a 0 level at $160 making a very good fit, and it pings nicely with earlier price movements as well. Then again, ratio analysis seems to support a bottom nearer my original $260~ prediction. If one looks at the ratio of the previous peak-drop (710-340), and applies it to the latest peak of $540, the result is $270.



I suppose it's possible the $250-270 range may act as support, which will be immediately followed by a sharp rise and yet another cycle taking us to $160 bottom, like so;



Good trading opportunity if true

This is all, of course, nooby fringe TA, and only even remotely relevant if the bear trend is still on, so take it as you will. If daily SMA50 and 100 are broken, I will consider the bull market confirmed. Until then, I remain undecided, leaning towards being a bear.

Just my 2 satoshi

I took a picture of what the early reversal phase of 2013 (July) looked like in terms of fibo levels. Note how, similar to now, at first price was zig-zagging around the 23% retracement level (red rectangle) of the initial uptrend (from ~63 to ~100). That was shortly afterwards followed by a big dump that took price down below the 50% level. However, on the 6h chart we closed exactly once below that level, and then began a beautiful, uninterrupted rise to the end (i.e. we made a new post capitulation high). See: green rectangle.

I think it's interesting to observe that volume wasn't particularly impressive during the early stages of that recovery... I can't really call it a divergence, but it also doesn't look confidence inspiring. The price action on the other hand was impressive: over the course of about 11 days we made it through 50%, 38%, 23%, 0% levels with no additional serious retracement down.


What about now? I suspect the following two factors will greatly influence whether we will see the reversal fizzle out again like in March, or whether we're really turning around this time: (a) how much force the downtrend on the 6h scale still has, and (b) how much force the following uptrend on the 6h scale will have.

If we end the 6h downtrend early, say within the next 24 to 48h, then I see a good chance that the following uptrend on the 6h scale will take us above 548 (to a new post capitulation high), which means the situation would look pretty different from March.

If, on the other hand, the 6h downtrend drags out, for another 4 days or so, keeping us near or below 23%, then we could hope for the following uptrend to be unexpectedly strong, taking us to a new high (though I'd consider that less likely), or we could see another anemic uptrend on the 6h scale, like the one from March 12 to 14, after which I'd give it a high chance that we'll see a more dramatic decline shortly afterwards.

I'm just plotting data, no assumptions. I showed the 52 week MA because thats where we touched this year. last time, we touched the ~200-250 day MA line, depending on what exchange you're looking at/trading on. fyi, this correction is certainly not sharper than previous ones. in fact, they are getting less sharp each time (2011>2013a>2013b/14).

im just playing devils advocate a bit and trying to show thats it quite ok to go below the exponential trend line for a little while longer. we swung way above it for a while in the double bubble of 2013. And to the point, Volume is a tricky metric to follow in such an illiquid and easily manipulated market. Also, since a sig % of the economy's liquid assets (coins on exchanges) have been in a bit of turmoil lately, volume might not be the most reliable metric at present. A couple things different from last year, i think there is a lot more volume happening off exchanges. Personally, i purchased sig numbers of my new coins directly from a miner during this decline instead of through exchanges. Also, I (and many others) are not trading as much (or at all) because there is no "Mt.Gox of 2012-2013" and times have changed. there are no other good options that i want to leave that kind of volume on exchanges anymore. its time for a bit of a breather and a reset of the ecosystem. No wants to get Goxxed again at btc-e and i certainly dont want to go through the new kyc/aml standards at bitstamp etc, etc. these are just points to consider as confounds to the argument.

of course, i do agree that its important to stay vigilant though, because when trend lines break, thats when our models start changing.

Hmm, I think that the only plot looking really optimistic was the original 12 weeks one. It also shows the correction was much sharper this time - at least the pots are looking this way.


BTW, are you assuming that the blue trendline (?) cannot be broken? How it behaved in 2011? Clearly, if we are about to enter long-term bear market some trendlines have to be broken

I did not mean "fake" in the sense artificial, I meant I do not believe it was beginning of the another bull market, it seemed like it will be very transitional. Indeed, CMF was soon in the negative territory again and many other indicators exhibiting downtrend.

i appreciate you trying, so here's the shorter 2 week average again but outlining the bottoms. seems like its still increasing no? thats what im seeing..

i think its ok the shapes are not identical. Perhaps the impact of misplacing a few hundred thousand coins is reducing the global trading volume and thus adding some noise to the general long-term uptrend in volume.... i think we'll just have to ride it out and check back in a couple weeks, as you suggest.

I'm trying to see it your way, but I simply can't. Your 8 weeks picture still supports your point, because it clusters the March rally and the April rally together, along with their volume. Your 4 week and 2 week picture on the other hand start resembling the view I presented above: if you treat March and April separate, then it shows that volume was higher during the March breakout attempt than during the one we've seen so far.

Which view is the correct one (cluster, or not), I can't say with certainty.

absolutely. the parameters shape the result and the interpretation.

12 weeks avg was shown above. Your ~1 week (or 10 day) avg is not much different than what you are showing initially.. that is, it could be noise. we don't know yet.

more smoothed values on the weekly... and they all look similar to me so far.

8 weeks


4 weeks


2 weeks

I think that's more an artifact of the specific parameters you selected for your volume average than an actual signal. I just tried to recreate it myself, and any other value than 12 (i.e. 12 week volume average) gives a much less clear "upwards slope" at the end.

Here's a slightly more fine-grained picture, but still rather smoothed out (3 period average over 3 day volume). One could argue we're not doing so great with volume this time when compared to 2013, where the "reversal volume" showed clear signs of going up again. But of course it can still pick up this time, once we're more clearly settled at above 500.

maybe zoom out a bit... longer-term volume trend (smoothed) seems right on track

I'm not sure I would call it "fake." 340 felt like a fantastic deal to many out there. So did everything between 340 and 420. From there, it's only a small step to buy in successively higher tranches. That's just the momentum.

But we are again in the same situation as before: once the initial enthusiasm about having scooped up those "cheap coins" is over, is there any sustained buying support at the level where we happen to land. And I can honestly say, I'm not sure about that. And so is the market right now, it seems.