Topic: Yet another analyst - page 4. (Read 10498 times)

All boils down to investment mood, doesn't it? I agree, on the major movements, capital and equity basically just flow in or take flight, always. In between, things in Bitcoin happen independently (and great point on magnitude) but if there is strong movement in stocks, it's going to trigger trader emotion across the board. Also proof for me institutional investment in Bitcoin happened long before people said they were waiting for ETFs and such.

It's the same correlation in crypto itself. Bitcoin goes up, so does the rest of crypto, but at different magnitudes.

I cannot see that we are arguing about facts.

We seem to be arguing about which facts to consider and how much weight to give to certain kinds of facts.

By the way, that correlation calculator that you linked makes little sense to me, and I had also already shown you charts over 6 years and 9 years to make comparisons between bitcoin, gold and equities, and if you are still striving to witness correlations or to read those kinds of price changes as as if BTC, gold and equities are correlated, then our definitions of correlation seems to be quite different.  

Hard to communicate if we cannot agree on what seems to be basic terms and even visuals about price change differences between assets over such period of time 6 years versus 9 years.  You are not coming up with different facts than me in terms of how much there are differences in the changes of the BTC prices as compared with those other assets classes, are you?

Probably our difference is in regards to the accounting for magnitude.  You already said that magnitude does not matter in your assessment of what is correlation, and that is likely part of the explanation (but surely NOT all of it) for why we are coming to differing weighing of conclusions based on looking at similar charts and how we read the facts in terms of what is the meaning of correlation and how much weight to give to patterns that we might see within the charts.


I seem to appreciate that BTC has had several up and down cycles in there that seem to fall in line with the halvening (even though there could have argued to have been two upward cycles in BTC in 2013).   There have been a few extended price crashes in BTC too, and at the same time, BTC is a new emerging asset class that likely puts it into a kind of s-curve adoption curve, while stocks and gold are more mature assets (though you do not seem to be making any claims about gold, currently).



Well, if you are merely playing short term plays and failing/refusing to make long term bets, then hopefully you will still be able to profit from that.  Hopefully, you do not sell too much of your BTC too soon, merely because you may well be treating it in a similar way to a mature asset class when it likely is not fitting very well (except by force) into that framework.


I agree that the models are descriptive in terms of how they get to where we are at and they are probabilistic in terms of attempting to describe where BTC prices might be going, and probably we can agree to disagree in terms of how much weight to give them.


I think that largely I already preemptively addressed your assertion that some day these models will no longer be valid.  They seem to be currently valid, so sure if you don't want to give hardly if any weight to them, then that is your choice.  I speak of them in combination anyhow because I take each of them with a grain of salt, because in terms of predictive value NO model is going show exactly where BTC prices might go when it comes to specifics, even if they might kind of get directionally correct, somewhat.


I largely agree with you that bitcoin is going to move harder than stocks or even gold, and that greater amount of movement is part of the characteristics of an immature asset class (it takes less capital to move it), but still it seems to me that your downplaying magnitude in your assessment of correlation is likely going to cause a failure to identify and to appreciate the power of the BTC price models that I have already pointed out.  Sure, there might be some other stuff going on too that the models do not quite capture - including some short term dynamics that can end up rippling into affecting longer term dynamics, and I have never claimed to be any kind of expert in getting into too many technical details, anyhow.  I have also been quite opposed to attempting to put too much emphasis in technical analysis, anyhow in terms of mathematical models will frequently fail in certain regards in terms of capturing human behavior - including the fact that sometimes a mere few number of people can sometimes end up changing trajectories that might not have been foreseeable in the models...

At the same time, on an ongoing basis, I do follow the proclamations and the analysis of a number of other folks who analyze BTC price dynamics in terms of a variety of factors, including sometimes what could be categorized into one or more of the three outlined price prediction models... and those models do assist in attempting to understand the information that i am getting and analyzing the strength or weakness of such information.

I don't care to argue about facts. I just observe. You can verify asset correlations for yourself here: https://unicornbay.com/tools/asset-correlations

Although it's easy to spot on a price chart too.


Both stocks and BTC have been in a raging bull market since Bitcoin's inception. That's the big picture. That could certainly change, but I don't feel the need to speculate about that. I'd rather just observe.


BTC started at $0.01 shortly before that and gold was on the tail end of a bubble. Not the fairest comparison.

But again, magnitude is another issue entirely. Correlation implies when x goes up, y goes up. It doesn't imply equal percentage magnitudes or anything like that.


All of which are experimental and not well-founded in any statistical sense. I'm very confident stock-to-flow will be invalidated over time. Same with the 4-year fractal. We don't even have evidence for an S-curve yet, although it's my favorite theory of the three.


In my opinion, magnitude isn't important to this analysis. The point of looking at asset correlation at all is to help confirm the direction of the trend. As far as magnitude goes, we can be reasonably sure that BTC will always move harder in both directions compared to stocks.

You can proclaim correlation until you are blue in the face.  I don't buy it.

If you are 80% correlated, but it happens that on those 20% of the time, BTC goes shooting up.. that is not correlation, even if you may have some short-term episodes of correlation, the BIG picture is not correlated.

Look at this chart comparing BTC to gold and to stocks.  It only goes out 9 years, but 9 years is long enough to make the point.

You have nearly 300x BTC price appreciation during that time, and you only have 44% and 54% in gold and equities respectively.

Of course, you could choose a shorter timeline and get less disparate price performance, but that still does not rise to the level of correlation, unless you are just making shit up.

Look at this 6 year comparison.

You have almost 12x price appreciation in BTC and merely a 50% price appreciation in gold and a 33% price appreciation in equities.

Yeah, maybe you have periods of 80% or whatever correlation contained within that overall period, but the punchline still does not seem to be anywhere close to actually making some kind of meaningful long term correlation claims.

Sure, go ahead and make short term correlation proclamations, and sure those are going to be true, until they are not.

I am not proclaiming that the future is guaranteed from the past patterns, but the currently existing strong BTC price prediction models are still showing a lot of convincing patterns and evidence that put pretty decent odds on continued upwards growth in BTC that are not correlated to gold or equities.


Just to point out that the three most dominant and convincing BTC price prediction models are the 1) PlanB stock to flow, 2) 4-year fractal and 3) s-curve exponential adoption based on metcalfe and networking principles...


Huh?  That makes little to no sense - even if you might be technically correct, exstasie.  We surely better be considering magnitude if we want any kind of meaningful understanding about what is going on in bitcoinlandia compared to these other assets such as gold and stocks and how we want to allocate our various long-term investments and to play our long term strategies... including not screwing ourselves by attempting to play our short term strategies that end up losing sight of the BIG picture, including the magnitude of chances that could end up trapping someone into selling too much BTC too soon because they are valuing their wealth in dollars rather than bitcoin and they do not account for the magnitude of change that ends up locking them out of BTC and causing them to feel bitter about the whole thing.  We have already seen these dynamics several times in bitcoin's history where some previous BTC HODLers sell too much of their BTC stash (even all of it) too soon, and then the price never comes back down to their selling point and they become more and more bitter and unwilling to buy back at higher prices, which causes them additional opportunity costs in terms of further bitcoin price appreciation.  It happened in the past, and seems quite likely to happen again, especially if current BTC HODLers do not appreciate that  magnitude of change continues to be an important factor to consider when considering baloney correlation claims.

There have been articles and studies on the lack of correlation in BTC going back quite a way.. maybe even in 2015/2016.  Here is one from January 2017.




These surely are far from straight line correlations, even if they are going in the same direction.

You seem to be under-appreciating the power of king daddy and that it is on a bit of a different trajectory in terms of being an asset class that has not previously existed.   Paradigm shifting asset class, which is part of the explanation for its lack of correlation to other asset classes.



Sure, at some point we are all dead, too.  What does that matter?

For now, the BTC price prediction models are doing quite well in terms of showing where bitcoin came from, where it is and also placing reasonable probabilities on where it might be going.

With any price prediction model or combination of models, we should be striving to account for current evidence and any additional evidence that plays out, so the price prediction models may well need to be tweaked in the future or they might show that they are actually broken and they do not explain the story very well in terms of where we came from, where we are at or where we might be going.  Until then, they remain the best game in town in terms of trying to figure out what to do and how to plan based on where we are at and how we got here.

They actually correlate very strongly over the long term. BTC and the S&P 500 have a positive correlation well over 0.8, going back to 2010 when BTC price discovery began.


Why would you be surprised? Correlation implies that price moves in the same direction. It doesn't address magnitude. If BTC is going to $1 million, it doesn't mean the S&P 500 is going to 300K.

I'm confident the current prediction models will fail at some point in the future too.

It will be an interesting scenario, if traditional markets such as gold and stocks were to go sideways or down for a year or more and to find out if any of that has any chance of breaking bitcoin from its cycles - which are not long term correlated to those traditional assets, even when peeps attempt to put emphasis on short term correlations, that may well be merely coincidental rather than longer term viable.

Personally I doubt that we are going to find ongoing longer term correlation, even if such correlation might be able to stretch out for 6-12 more months... probably best case scenarios... If we see ongoing correlation for that long (6-12 months) I would be quite surprised that such would even be possible, and if such correlation were to go on longer than that (longer than 12 months), we might have to start considering whether some or all of the BTC currently valid price prediction models might have some flaws therein... Seems quite improbable, even though we cannot really know until such passage of time were to take place with such unlikely ongoing correlation.

It would be prudent to keep track of the US stock market at this time. The 50-day MA and lower daily BB are clearly important support levels, and the market is hovering right above them:



As long as we hold above, it's hard to get too bearish, and with risk assets (BTC, gold, stocks) so tightly correlated, this would be bullish for BTC and would likely support the mid-term sideways scenario discussed earlier.

If the market breaks and holds below those key support levels (currently ~3,300) it will signify a mid-term downtrend, which would definitely have bearish implications for BTC.

This looks like a running bearish triangle to me:



So I've still got a bearish bias short term, and I'm still looking for the weekly CME gap around $9,600 to be filled.

This bearish triangle will be invalidated by a break above that $10,441 (Coinbase) pivot. That would imply this bottom off the $9,800s was an accumulation (rather than distribution) zone.

thank you for the attention, really appreciate it.



I think so, the BTC price movement did not go down too far, but the main target is the btc altcoin only down in the range of 2-3% per day but the alt can reach more than 40%.
I am holding an alt that has had a huge price drop because of this dump and has been down more than 60% from its baseline since this dump happened.

That possibility won't disappear so quickly.

Time is difficult to predict. The best method I've come across is Tim West's "Time at Mode" methodology. You identify a trading range and measure the number of bars spent at one price. Once a range expansion occurs, that number of bars roughly determines how long the subsequent trend will prolong for.

Here is a good example: https://www.tradingview.com/chart/SPY/0bRbUhpL-Time-At-Mode-Methodology-in-SPY-Daily-Weekly/


In Bitcoin's case at the present time, the rally congested and tested the mode, but then failed.

Looking at the daily and weekly charts, we spent approximately 21 days and 5 weeks respectively at $11,700 which I would consider the best representation of the mode. The September 2nd drop clearly triggered a range expansion away from the mode. From that day, we have approximately 21 days before the downtrend on the daily chart "expires" and 5 weeks before the downtrend on the weekly chart "expires." In the meantime, we should retain a bearish bias and not give up on our downside targets yet. On the daily, we are targeting the lower $9,000s. On the weekly, we are targeting the lower $7,000s.

If those downtrends expire and price is congesting without ever reaching our downside targets, that's a bullish sign indicating sideways accumulation.

In the coming week, BTC prices will go up, which should make you happy -

unless

such BTC prices were to happen to go down


or sideways

ok yesterday btc went down to 9960 and went back up to the range of 10000 and since then I haven't seen a decrease again after that it was just between these numbers.
so if next week the market starts with an increase then the possibility of it going down to the range 9000 will disappear or will it still be?
since I started to see my portfolio increase I hope it will continue to go up, even though the reality will still be difficult.
please say something that makes me happy 

For me, EW is mostly about building an overall road map that keeps me trading on the right side of the trend, but it does offer some insight regarding entries and exits.

For example, if I believe a bullish Wave 1 is complete (as above) then I would expect Wave 2 to unfold either as a sharp 3-swing corrective like an ABC that reverses in the 0.5-0.618 area ($7,100-$8,200) or a complex sideways corrective like a WXY that reverses in the 0.382 area (~$9,200). Those would be the most common scenarios.

So with that in mind, I look for confluence with other classical TA methods near those expected Fib levels. Candlestick and volume analysis, divergence, horizontal S/R like pivots, gap analysis, Bollinger bands and key MAs......all play a role.

The 0.382 in the upper $9,100s lines up with significant horizontal S/R from June-July. Several weekly pivots in that area. There is a low volume notch in the mid-$9,000s as well as a big gap on the weekly CME chart at $9,600. All of this tells me to look for signs of reversal (bullish divergence, volume extremes, reversal candlesticks) and a possible entry in the low-mid $9,000s.

In the first scenario (the sharp correction), this bottom would represent the A swing low. So we can counter trend trade the bullish Wave B with the expectation of a future bearish Wave C. In the second scenario (the complex sideways), this bottom would represent the W swing low. The subsequent X wave is a bullish retracement, followed by a Y wave which is usually a higher low. Since these are the two most common scenarios, it makes a lot of sense to look for entry in the low-mid $9,000s, then wait and re-assess to determine which scenario is unfolding.

Risk vs. reward is also a key part of my rationale for whether to enter a trade. If I can't get 3:1 or better I usually don't take the trade. Often times, the correct EW count is only obvious in hindsight, after the ideal trade entry is long gone, so it's important to use other methods to identify those opportunities.

Often times, I'll have 2 or 3 different possible EW counts in mind, but generally all of them will incorporate the same key Fib and S/R levels. So we can trade all those levels the exact same way (basically, buy at support and sell at resistance) while the EW roadmap builds out from a bird's eye view, giving us a sense of where the market is headed next.

Yes, absolutely. My theory is the March-August rally is Wave 1 of a larger bullish impulse. Wave 2 pullbacks can be quite sharp and severe. A 61.8% retrace to the low $7,000s would be pretty typical. However, I would first expect a sizable bounce off the $9,000s given all the consolidation there during June-July.

That is not to say Wave 2 must go as far as the 61.8% fib. It could also be a complex, sideways correction that doesn't go below the 38.2% in the $9,000s. We'll have a better idea in a couple weeks as more price action comes in.

but it looks like your prediction is right, now the price is at 10,200 where you mentioned the breakout at 11000.
likely a price to 9600 will occur.and now my assets are min above 40%
is there any possibility of a deeper drop after the 9600 point?

Well there you have it, a very unambiguous breakdown! Minutes from the close, that is one bloody candle:



Hopefully bulls had sensible stops below $11,200 or $11,100 because that was one heck of a waterfall!

A new downtrend on the daily chart has obviously been triggered. Filling the $9,600 CME gap looks very likely now. There is a nice low volume notch to fill in that area too. Could go further than the mid-$9,000s but it is a very interesting support zone that could serve as a final stopping point.

The hourly chart tells me we may have seen a local bottom at $10K because of the volume extreme and potential momentum divergence. I think we may have completed (or be near completion of) a local bearish Wave 3. I could see the market grinding back up to the 0.382 and pivot resistance around $10.7-$10.8K but I would expect a return to the lows and likely further.

No, I don't mean that.

I'm looking for an obvious breakout. Breaking and closing below $11,100 should do it. After that, I'd be looking for $9,600.

Yesterday's ~$1,000 dump brought us to the lower bounds of the range, but BTC is technically still just ranging. Don't want to jump the gun here.

do you mean that this week it will drop to 9600? hmm, I did see a very fast decline last night where all the alt also fell, some even fell above 15% in just a few minutes.
but a few minutes after the btc dropped to 11000 right, then it went back up and stayed in the range 11200-11,500.

Very ugly daily price action. This big bearish engulfing built out the right shoulder of a potential H&S:



Still holding the daily BB squeeze though.



Time to pay attention. We could see another rejection of the bears and grind back up. All this time spent in the lower half of the bands and the stiff rejection today have me leaning towards the bearish scenario though.

Holding below the lower band around $11,200 and the $11,100 pivot low will signal a downtrend.

I could see a daily downtrend running to the weekly BB basis in the upper $9,000s, or filling the weekly CME gap around $9,600.

Ping pong, ping pong!



This is an excellent example of why you should 1) wait for a high time frame candle close before assuming a breakout has occured, and 2) wait for a pivot or BB breakout. Selling and shorting diagonal trend line breaks is often a great way to get trapped when price floats back into the range, as it has the last 2-3 days. Horizontal S/R is what really matters.

And we wait......