Topic: Something, something, something, technical analysis - page 9. (Read 31170 times)

Oda, do you think your violet scenario - retrace to ~540 - is occurring right now?

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and you're still be idiot, your usual self

Willy bot working hard to rise up the bitcoin price, and trying to adapt us to the new level price,
but this will be short term, and after that coming final fall and bitcoin the end.
Bistamp or or any other exchange will be shutdown.
(mining factor will be below 1 cents per GH at 24hr)

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If it was ~640, it is left far behind ... Does bitcoin ever corrects properly in the bull market, or do we only have flat price action instead of corrections? So far there was not a meaningful correction since the breakout from $450 happened 

200 SMA won't go without a fight but if it does, then we might be into something 

So much for the upper boundary of that channel... broken, after just a short 4 day breather. In the end there was only little resistance at 600 -- partly because the orderbook is pretty empty. Yay for sellers' exhaustion! (12k coins asks in total on Bitstamp order book vs. 24k about a month ago)




Next likely point of resistance? Probably daily SMA200, currently ~640. No idea whether we can make it through that one as well, but I'm skeptical... it's starting to look a bit overextended to me. No good reason I can see to go short though, if you're only aiming to sell on the big swings down.

Not by my analysis. I have argued strenuously in here that I see strong evidence of (natural) buying support in the mid 400s. You're free to reject that conclusion obviously, but by my interpretation, pink line would just be 'ever so weakly upwards leaning consolidation'.

Basically, broken trendline doesn't mean much to me if there's a stronger factor in the back of my mind. Short term, it would be bearish, sure: we'd go below the 23% fib 1200-340, which means you'll hear the bulls cry again. Could be however that breaking through it without closing under it is the confirmation we need that we're out of the larger downtrend for good.

EDIT: and that particular trendline, the one that goes through the SR crash, is not a favorite of mine anyway. SR is a borderline outlier, so I weigh it less to begin with, it's far far in the past, with zero point between then and now even getting close to it, and it's angle is way too steep to really be a realistic line of support. the trendline that formed the triangle I looked at (until we broke out 9 days ago) was simply the slightly rising support through ~400.

Your pink line, crashes right through the trend line which was tested last week around $440, met at the $340 bottom, met again in the Oct Silk Road Crash, and trended along in Jan 2013.

If your pink line comes to pass, I would need to look at only shorting Bitcoin as a long term uptrend would be confirmed as finished, which would of course mean that we would be in a downtrend.

Here's the best guess I have about our situation: We're trading inside the following upwards channel for now:



We could go straight up from here, breaking out of the channel (yellow line. not that likely anymore, in my opinion), we could test the mid line and find support (quite possible), we could test the lower boundary and find support (less likely, but possible), or we could break through the lower boundary (not likely right now).

(EDIT: none of the lines defining that channel are strongly motivated, but I take the fact that they form a (rough) parallel channel as a bit of evidence in favor of them. Point being, actual support and resistance might be more closely located around fib levels and running averages in the vicinity of those lines than around the exact lines marking the channel itself.)

Everything but the blue line is pretty bullish (except for a bit of swinging around). Everything that comes after this channel requires a level of predictive power I personally can't find motivation for right now.

And for my taste also to let the truth be told, but speculating such a negative figure, so far off in the distance, way beyond the mountains can prove useful nonetheless in that it provides a reminder that the bull market correction isn't over until it is confirmed as over. I can remember at least two times (Jan 2014, March 2013) in recent Bitcoin price history where even I was convinced that the bear trend was behind us and new ATH's were on the way, only for the reality of the situation to bite me on the arse, twice.

I never knew anything about EW theory back then, but if I had, I may not have been so confident that Bitcoin was going 2 da moon. Just recently, I watched a video of a DanV Session on youtube. This was back right on the very eve of the Jan 6th 2014 $995 high. DanV was of course using MtGox to chart Bitcoin but even at this point, when the 'euphoria' was reaching its peak as Bitcoin shot through $1000 on 'Zynga news' (LOL), his adherence to EW principles lead him to the conclusion that we would have to retest the $450 low (MtGox). He was of course ridiculed and laughed off the internet, but we all know what has happened since then.

Perhaps the top of the corrective Wave B will coincide with official media confirmation that Bitcoin's astronomical rise in 2013 was largely due to fake volume generated by Willy n Markus on Gox, raising the question of similar pet fraudulent trading bots on the other large exchanges?

Point is, it looks to my eyes that we have just had a classic Wave A down, consisting of a clean 5-3-5-3-5 impulse wave down, with correspondingly appropriate fractal waves within them. Now it seems like we are on a Wave B. Lots can happen, but I think most people here understand what the most text book example of an ABC corrective wave is.

Possible. The rising wedge you see is definitely an option, and (at conclusion) has a bearish bias. But:


...is kind of out there. To conclude that, based on your currently favored wave count, we're going up until late August, then will break down to a new correction low is a bit too speculative for my taste.

MTC:
"Long term: Bitcoin to $200."

You should be a standup comedian.

So funny. It just shows you how anyone can do TA and make it fit your own personal view.

I know you're going to go verbal on me for saying it. But, I will always cherish your point of view, however bearish it may be.

You DA MAN Mat! Bang all the bagholders!

Here is some Elliot Wave analysis depicting where I believe we are in Bitcoin's price discovery progression. The chart shows that we may be in the midst of a counter trend  Wave B, after having had a corrective Wave A, which consisted of a clean 5-3-5-3-5 impulse move down:





The next chart below, shows the possible development of a leading diagonal Wedge formation. Important to note, is that the support line for this wedge traces back to Jan 2013, and was the support line which was tested just a couple of days prior to the break out above the Jan 2014 resistance line. The resistance line shown in red, is from the Dec 2013 highs. It was also broken through at $540 mark:




Below, is a 4hour Bitstamp chart showing that the support line for the $440 - $595 rise has been breached, with a parallel down channel showing likely price trend over coming days. Note also the negative divergence of the RSI, and also the maxed out state of the MACD. The two reddish lines on the chart are the 38% and 50% Fib retracement targets. This is where I believe the correction is likely to stop and find support for next leg up of wedge. Should Bitcoin trend lower than this and touch and/or get beyond the 61% Fib retracement line around the same time (or before) the projected parallel trading channel meets it, then this could show itself to be a critical turning point which renders this TA null and void, as the lower blue support line, is not just the support for the wedge, but a long term support since Jan 2013:





This final chart indicates that if the Wedge Support line is breached, then we could assume that Wave B has played out between $340 and $595, and that Wave C will have begun. At this point in time however, I am not thinking this is going to play out:




Summary:

Short Term: Bitcoin to trend down to $500

Medium Term: Bitcoin to continue to zig zag in rising diagonal formation shown, ultimately breaking out and reaching 50% Fib retracement zone (~$750) marking $1160 - $340 correction.

Long term: Bitcoin to $200.

I like the approach: segment our data into different types of periods (I'm trying for now: bubble-rally, bubble-deflation, consolidation-upwards, consolidation-downwards) and see how RSI behaves in each segment. Playing around with it myself now.

Willy bot creates RSI indicator and the price and chart.

RSI can stay overbought/oversold for a long time in strong bull/bear markets.

If yore going to be calling bubble tops with it use a long time period, like 3d or weekly.

Fair enough, yeah makes sense.

Naturally I won't be basing any trade decisions solely on RSI (particularly not when I'm such a noob with it ) but rather in combination with other analysis. Though it should be noted that the October and November cases you mention were all during the bubble, when (I assume) overbought RSI should be the rule rather than exception, and the example I mentioned (August 2013) was well before the bubble, so from this one might infer that RSI being overbought outside of bubbles acts as a stronger sell-indicator. But then of course there is the problem with knowing how long it will stay overbought, and how high it will go, which (as previously mentioned) necessitates one using other indicators in combination to make any hard decisions.

Though, looking at historic timescale on Stamp, I just noticed an interesting pattern: For every case of (daily) RSI being overbought outside of bubbles, the RSI top has been extremely consistent before price went down/consolidated: 83-85 (what do you even call that, RSI level?). Currently we're on 79, which according to this would give us some more room to go before the hypothesized correction (also assuming this is not the start of a bubble, which I doubt). Curious to see if this pattern holds again.

As a general rule (and I say that as someone who's also still learning pretty much the basics), seeing an overbought/oversold condition and making a decision (mainly) based on that is not a good idea.

Example: daily RSI was overbought on October 23rd, November 9th and November 19th. Only on the last date, I'd argue, would it have been profitable (after slippage and fees) to sell and re-buy (fast!), because the drop in all other cases was barely noticeable. In either case, after a possible sell you better would have went in immediately, because  price still had a long way to go until the inflection point peak of the bubble.

But taken together, the 3 RSI overbought conditions formed a nice rising sequence, confirming the uptrend until late November. November 30th and December 4th saw rising (or level) price highs, but declining RSI highs, i.e. a regular bearish divergence. So RSI analysis was after all capable of indicating that a reversal was overdue, but only taking all the RSI peaks together.

So that's how I try to read oscillators like RSI: overbought/oversold conditions are at first just a "warning" signal that you need to look at the context around those peaks. But the actual conclusion what the indicator tells you is a bit more complicated than concluding that we're going down or up (substantially) because of the overbough/sold condition.

Ah, good points, especially regarding Huobi. Just took a look and there doesn't even seem to be any wedge formation(s) on that exchange, so maybe they can keep dragging Bearstamp along (if the wedges are valid in the first place, that is).

Nevertheless, daily RSI is still overbought on both exchanges, although this doesn't necessarily have to signify a very huge drop I realized, as during 2013 it also got into overbought territory once before the bubble, and this was only followed by a correction of $130-115 (as well as a longer period of consolidation) before resuming the rise (disregarding the SR flashcrash).